Speaker 1: 0:10

Hello and welcome back to that Home Loan Hub. I'm Zibuni Salimova. I'm joined by Kunjai Adams today. Hello, kunj, good morning. Let's talk about refixes.

Speaker 2: 0:20

Yes, I thought we'll yeah cover refixes like what is a refix and what sort of interest rates we're seeing and things like that and when that happens and when that happens.

Speaker 1: 0:31

Yeah, Awesome. So topic number one what is a refix?

Speaker 2: 0:36

So a refix is when your home loan, your current fixed loan term is coming off that fixed term. So, for example, you may have refixed for six months and then six months later it's coming off its term, so we call that a refix. So a refix is you get to choose a new fixed term and new interest rate.

Speaker 1: 0:59

And normally you would stay with the same bank if you've just got a mortgage in the last three years. Normally, however, if you have been with the same bank for more than three years, this is your golden opportunity to look for a better deal, as we call it, so refixes when a lot of banks at the moment are offering you online rates as well. Yep, so pays to check what have you got, because what they call it now is personalized rates. So, according to your relationship with the bank, you may get slightly better rates than Uncle Bob next door. Yeah, yeah, because you might have, you know, five properties and a $3 million mortgage, versus Uncle Bob next door maybe only has one house and 100K mortgage.

Speaker 1: 1:47

Yeah, Now, the important part here not to miss is usually people ask how long should I fix it?

Speaker 2: 1:54

for not to miss is usually people ask how long should I fix it for? Yes, that is hot topic at the moment, Given that we've just recently had a reduction in the OCR and then we've got another announcement, due in July, I believe, or no.

Speaker 1: 2:09

August, july, july, yeah.

Speaker 2: 2:10

So there is another one coming on board. So a lot of discussion about do you float or do you fix for short term. So, again, these options are personalized to your own personal situation. So you've got to think about, okay, what is going to happen in six months' time as in, are you planning on moving? Are you planning on selling? You've got to think about all those things when you come to fixing. Just even earlier, when I had my own refix come up, I actually had to say to Zeb and Iso what do you think, what do I go for? And she said one little thing when are you going to plan on building your house? And that's where it helped me choose my term. So, yeah, you've got to think about your own personal situation to help you choose the correct term for yourself.

Speaker 1: 3:11

Yeah, correct. And normally when I look at people's situation, we talk about things like hey, are you planning to have a baby or did you just have a baby? You know, do you just want stability for the next three to five years? And then, once you know that the kid goes to school, then you'll have more flexibility in your time so you can work more, et cetera, et cetera. So all those things come into play when we're thinking about the refixes.

Speaker 1: 3:33

Or are your kids about to leave home and then you know you might sell a house. So if that's the case, you don't want to fix for too long, because if you're going to sell your house, then there will be bigger break fees. If the rates continue to drop, there might be break fees, and that's another thing about the break fees. If you haven't listened to that episode, I did do an episode about the break fees quite some time ago. So go and listen how the break fees are calculated, because they are calculated daily based on what the wholesale rates are doing and how much the bank is losing on you if they let you go. And usually if the break fees are non-negotiable, you have to pay them. There have been certain cases when the bank may negotiate something, but the circumstances have to be quite significant.

Speaker 2: 4:21

Yeah, I think over my you know 15 years in the bank, I've never seen someone break fee get waived. Yeah, yeah. So I think there'll be exceptional circumstances if that was ever to happen, exactly, exactly.

Speaker 1: 4:33

So very, very important to understand that what works for Uncle Bob next door when it comes to history fix may not work for your own situation. So this episode is not a financial advice whatsoever. Work for your own situation. So this episode is not a financial advice whatsoever. The advice here is to go and seek financial advice with someone like me so we can talk you through your current situation, take into account your current goals and your future goals and, based on that, we can do that. Now, one other thing people don't realize when the refix comes up, this is your golden opportunity to review does the structure work for you? And we talk a lot about flexible loans, revolving facilities and things like that.

Speaker 2: 5:13

Offset facilities and things.

Speaker 1: 5:15

Yeah, let's dive into that, yeah.

Speaker 2: 5:17

So, um, revolving credit is a line of credit basically, um your home loan set up as a revolving credit, where your wages usually gets credited into the account, and that offsets the interest that you pay when, because interest is charged daily on those on the revolving credit. An offset is a similar type product but slightly different. So what an offset is is pulls your transactional accounts balances together and that offsets the offset loan.

Speaker 1: 5:54

Yeah, so there are different banks provide different products and how it's all structured. And again, this is where it's important to talk to the financial advisor, because we can structure it in a way that maximizes your money to work in the best possible way for you. Because, remember, when the interest rates, ocr, when that goes down, the floating rates go down, the fixed rates go down, but also the term deposit and savings goes down. So if you've got money sitting in your savings account at 3%, it's not doing anything for you if you could be offsetting your mortgage at 5%. So instantly you're making 2% back on your loan. And this is where we can look at your situation. We can say, look, this bank does not have this product, but this other bank has. So how about we refinance you, restructure it and make it work for you in the best possible way, yep, saving you interest payments in the long run.

Speaker 1: 6:47

Yeah, so one of the banks I'm banking with. What I love about them is you can actually pull up to 50 different accounts to offset that one, right. So what I've done is I've pulled my kid's savings account money into this particular bank and I've renamed it. I've renamed those accounts into their name, so I know it's their money and I just continue to put money into those accounts like I would for them anyway, but I'm making their money. Help me reduce the interest on the mortgage that I pay.

Speaker 2: 7:14

Yeah, it's a great day, great idea, great product, great product, one of my favorites.

Speaker 1: 7:20

Absolutely so, guys, if you're sitting there thinking how can I maximize the money, especially with the living cost, you know it's all going up right. The price of butter is ridiculous at the moment, so you know ain't no more cupcakes coming from me with the price of butter.

Speaker 1: 7:35

Oh man, we love Quinch's cupcakes, just off the record. And the thing is, you got to start thinking smart. You got to start thinking what can you do for yourself right now to help yourself reduce those interest rates, reduce your repayments or pay off your mortgage faster, et cetera, et cetera. So we're here for you, we're here to help. So reach out. If you've got any questions of this episode you found confusing or you're not sure what to do with that, share it with your friends, discuss it, get their opinions on it, ask them how they've structured it, but don't take their advice how you should structure yours. Go and seek financial advice.

Speaker 2: 8:14

Great, Thank you.

Speaker 1: 8:18

Looking at you, Coach. Thank you guys and have a wonderful week ahead, see ya.