We have a fixed rate loan of $620,000 that matures in Nov this year. We want to do about $150,000 in renovations and would like to refinance their existing loan and borrow the extra. Home would be valued about $950,000. Is this posisblea nd would there be any fees to break the fixed loan. What rate could we get?
Your ability to borrow the $150,000 will be based on the potential future value of the home and your capacity to repay the loan according to whomever you bank with.
If you meet the criteria to borrow with your current lender then there wouldn’t be any need to break the fixed loan, you would simply add on an extra loan against the home.
If you do need to use another lender to qualify, the break costs could be anywhere between $500 and $5,000 depending on the terms of your current loan. It is unlikely in the current environment that you would face a big break fee with rates very low across the market. Just give your bank a call and ask.
Best of luck with the renovations
Based on your figures your LVR is 81%. You will need to check the economic costs of breaking the fixed rate before November. I can get you rates below 4% p.a. depending on your income and credit score and your current mortgage repayment behaviour.