When to refinance your mortgage
When you should refinance your mortgage is not always easy to know. Your situation and the economic state plays a part. Read on to learn more.
Great Rate Home Loan | Interest Rate # | Comparison Rate ^ |
---|---|---|
1 Year Fixed | 5.89% p.a. | 7.66% p.a. |
2 Years Fixed | 5.69% p.a. | 7.43% p.a. |
3 Years Fixed | 5.69% p.a. | 7.24% p.a. |
4 Years Fixed | 5.69% p.a. | 7.06% p.a. |
5 Years Fixed | 5.69% p.a. | 6.91% p.a. |
Ultimate Home Loan | Interest Rate # | Comparison Rate ^ |
---|---|---|
1 Year Fixed | 5.89% p.a. | 7.81% p.a. |
2 Years Fixed | 5.69% p.a. | 7.60% p.a. |
3 Years Fixed | 5.69% p.a. | 7.43% p.a. |
4 Years Fixed | 5.69% p.a. | 7.27% p.a. |
5 Years Fixed | 5.69% p.a. | 7.13% p.a. |
Great Rate Investment Home Loan | Interest Rate # | Comparison Rate ^ |
---|---|---|
1 Year Fixed | 5.99% p.a. | 8.00% p.a. |
2 Years Fixed | 5.79% p.a. | 7.74% p.a. |
3 Years Fixed | 5.79% p.a. | 7.53% p.a. |
4 Years Fixed | 5.79% p.a. | 7.33% p.a. |
5 Years Fixed | 5.79% p.a. | 7.15% p.a. |
Ultimate Investment Home Loan | Interest Rate # | Comparison Rate ^ |
---|---|---|
1 Year Fixed | 5.99% p.a. | 8.16% p.a. |
2 Years Fixed | 5.79% p.a. | 7.91% p.a. |
3 Years Fixed | 5.79% p.a. | 7.71% p.a. |
4 Years Fixed | 5.79% p.a. | 7.54% p.a. |
5 Years Fixed | 5.79% p.a. | 7.37% p.a. |
Fixed interest rate home loans give you the ability to fix, or lock in an interest rate for a certain period, usually between one and ten years.
During the time your interest rate is fixed (sometimes called a fixed term), your interest rate and the required repayments will remain the same.
When you should refinance your mortgage is not always easy to know. Your situation and the economic state plays a part. Read on to learn more.
Find out how what fixed and variable home loans are, how they work, and the advantages and risks of each. Learn more here.
Learn about refinancing a home loan from Greater Bank, including what's involved, types, benefits & more. Read our guide to find out more.
No one loan is perfect for everyone.
At Greater Bank, we understand that every one of our valued customers have different needs and are at different stages in their lives.
The right loan for you depends on these needs.
A variable rate loan means that the interest rate on the loan may go up and down over the loan period. This allows you to make additional or early repayments to take advantage of interest rate fluctuations.
A fixed rate loan means that the interest on the loan remains constant over a fixed period, so your repayments will stay the same. You will be able to budget for your repayments and are protected from rises in interest rates.
Still have questions? Contact a friendly Greater Bank staff member on 13 13 86 or visit your nearest branch.
A break cost fee may be payable if the loan is repaid before the end of the fixed rate period, or if you switch to another loan type during the fixed rate period e.g. from a fixed rate to a variable rate.
The break cost fee is an estimate of the interest we should have received for the rest of the fixed rate period compared to the interest we would receive if we relend those funds.
We compare the interest rate you locked into the equivalent current interest rate based on the time remaining on your fixed rate period.
If fixed interest rates have increased since you locked in your fixed rate, it’s quite possible that you won’t be charged a break cost fee.
We only charge a break cost fee if we will incur a loss as a result of you breaking your fixed rate loan.
A simple version of the break cost formula is:
Break cost = Loan Balance Owing x Interest Differential x Remaining Fixed Period
Here are some example break cost calculations:
Example 1 | Loan balance of $300,000 with a fixed rate of 5.00% p.a. for 5 years, which is repaid after 2 years. The time remaining for the fixed rate term locked in is 3 years and the current 3 year fixed rate is 4.00% p.a.
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Example 2 | Loan balance of $300,000 with a fixed rate of 4.80% p.a. for 5 years, which is repaid after 2 years. The time remaining for the fixed rate term locked in is 3 years. The fixed rate of 4.80% p.a. is the discounted interest rate (fixed rate less a discount of 0.20% p.a.). The current 3 year fixed rate is 4.00% p.a. and the equivalent current rate after allowing for a discount of 0.20% p.a. is 3.80% p.a.
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Example 3 | Loan balance of $300,000 with a fixed rate of 4.00% p.a. for 5 years, which is repaid after 2 years. The time remaining for the fixed rate term locked in is 3 years and the current 3 year fixed rate is 5.00% p.a.
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We understand your circumstances may change which might require you to payout your loan completely or change your fixed rate loan by changing the loan type.
However to do so, you need to ‘break’ the terms of your loan contract. A break cost fee is intended to recover any loss that Greater Bank will incur when a customer breaks their fixed rate contract; which can happen as a result of changes in interest rates.
A break cost fee may be payable if the loan is repaid before the end of the fixed rate period, or if you switch to another loan type during the fixed rate period e.g. from a fixed rate to a variable rate.
The break cost fee is an estimate of the interest we should have received for the rest of the fixed rate period compared to the interest we would receive if we relend those funds.
We compare the interest rate you locked into the equivalent current interest rate based on the time remaining on your fixed rate period.
If fixed interest rates have increased since you locked in your fixed rate, it’s quite possible that you won’t be charged a break cost fee.
We only charge a break cost fee if we will incur a loss as a result of you breaking your fixed rate loan.
A simple version of the break cost formula is:
Break Cost = Loan Balance Owing x Interest Differential x Remaining Fixed Period
Simple example break cost calculations
To calculate a pre-payment fee we take the extra payment over and above the 5% of the original loan amount and times it by the remaining fixed period and then times it by the interest differential.
Let’s look at an example:
For a $1,500 loan pre-payment, with a remaining fixed period of 2 years and an interest differential of 0.25%, the calculation is:
$1,500 X 2 X 0.25% = $7.50
Or, $1,500 times 2 times 0.25% equals a $7.50 pre-payment fee in this example.
A prepayment fee may apply to extra repayments you make over and above the 5% threshold.
A fee only applies if the current rate we could relend those funds at for the remainder of your fixed term is lower than the rate your loan is fixed at.
The fee, if applicable, is charged to your loan account at the end of the month that the extra payment is made.
When this fee does apply, it will only represent a small portion of the interest you may save by making the extra payment.
Even though your loan will be debited with a fee, it may still be beneficial to make the extra payment and reduce the interest charged to your loan.
Please take into account your own individual circumstances when making any extra payments.
In this example, no prepayment fee will apply.
The total amount of extra payments is less than 5% of the original loan amount ($7,500).
In this example, a prepayment fee will apply.
The total amount of extra payments is greater than 5% of the original loan amount and the current fixed rate for the remaining fixed period of the loan is lower than the rate that the loan is fixed at.
Note: Pre-payment fees don’t apply to an extra repayment on a variable rate home loan.
Yes, but it's important to be aware that during a fixed period, for Principal and Interest and Interest Only loans, a pre-payment fee may apply.
You're able to make extra repayments on these loans until you reach 5% of your original loan amount before a prepayment fee may apply.
Changing from one Greater Bank Home Loan Product to another is easier than you might think.
Get in touch with us today to see what our lending staff can do to make life greater?
Note: Fixed Rate break costs and Conversion fees may apply.
Yes - for whatever reason, if you decide your fixed rate home loan is not for you, you can break your fixed rate period. It's important to be aware, however, that break costs may apply.
Our friendly staff are happy to help with all your banking needs. Find a location near you across NSW and South East QLD.
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*Conditions, fees and charges apply to all loans. Subject to meeting Greater Bank's lending criteria.
Greater Bank, part of Newcastle Greater Mutual Group Ltd ACN 087 651 992, Australian Financial Services Licence/Australian credit licence 238273
++$2,000 cashback for loans ≥$250,000 or $2,500 cashback for loans ≥$500,000. Only one (1) Cashback Payment per eligible loan, and for first eligible loan only. Not available in conjunction with any other promotional payment. Offer may be varied or withdrawn at any time. See the full Cashback Offer Terms and Conditions. Terms, conditions, fees, charges and credit criteria apply.
~At the end of the fixed rate period customers can chose to re-fix their loan for another fixed rate period or let the loan revert to the applicable variable interest rate based on the loan and repayment type.
^Comparison rate is based on $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
#Discounted rates include a discount on Home Loans of $150,000 or over and for owner occupied Home Loans with an LVR 80% or below and for investment Home Loan with an LVR 80% or below and apply to new borrowings only. Discounted rate not available for Line of Credit facilities.
+Additional costs may apply if your loan has a fixed rate.
All new interest-only home loans, attract a 0.10% p.a. margin above the applicable Principal and Interest base rate. All new Line of Credit home loans, attract a 0.10% p.a. margin above the applicable Line of Credit base rate. The all-up interest rate which includes any margins, will be set out in your credit contract. View our Terms and Conditions.
FASTRefi® is a registered trademark of First American Title Insurance Company of Australia Pty Limited ABN 64 075 279 908.
Rate City Gold Award 2024, see http://ratecity.com.au/home-loans/awards for more information