I have a business and commercial property. I fixed my loans with Westpac before the first interest crash. I am currently paying 9% fixed. I want to get out of Westpac and into another institution. What will be my consequences?
Westpac is an Australian bank. Apparently, interest rates have taken a downward dive in Australia just as they have here; therefore, it may be a good time to try refinancing a fixed-rate obligation at a lower rate. Review your loan agreement to determine whether it includes any penalty for prepaying your loan, and whether the prepayment provision (if it exists) is still effective. Many lapse after the first year or two. Then talk to a lender at whatever bank you'd like to use about your refinancing request. Moving to a new lender will require that you repeat much of the up-front application effort that you doubtless went through before obtaining your present financing; it may also involve some up-front costs. Get a sense of the interest rate you're likely to pay at the new bank and determine whether it's low enough that the refinancing changes your cash flow enough to warrant the refinancing effort and expense.
To explore your options more thoroughly, you should consider talking to Westpac about refinancing your loan package in place. Given the fact that you have the ability to take your business from them, they might consider modifying your existing loans to a lower rate, eliminating the need for much if not all of any refinancing costs. Of course, whether you take the step of talking with Westpac could depend on your reasons for wanting to leave them.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Westpac is an Australian bank. Apparently, interest rates have taken a downward dive in Australia just as they have here; therefore, it may be a good time to try refinancing a fixed-rate obligation at a lower rate. Review your loan agreement to determine whether it includes any penalty for prepaying your loan, and whether the prepayment provision (if it exists) is still effective. Many lapse after the first year or two. Then talk to a lender at whatever bank you'd like to use about your refinancing request. Moving to a new lender will require that you repeat much of the up-front application effort that you doubtless went through before obtaining your present financing; it may also involve some up-front costs. Get a sense of the interest rate you're likely to pay at the new bank and determine whether it's low enough that the refinancing changes your cash flow enough to warrant the refinancing effort and expense.