Hi guys
Opinions needed please. Asking for a friend.
He bought a block of land recently. Land Loan with ANZ @2.79% variable and has been offered 2.09% fixed for 1 year (fixed with offset) for the land part. Construction loan will commence in a month and offered 2.79%.
Can't decide whether he should fix the land for 1 year or continue as variable for 6 months and when construction is complete and then refinance the whole and get cash backs… I have done some rough calcs and I think he will be better off on variable after taking into account the refinance cash backs. Is it possible to refinance twice in 6 months?
I know there are better variable rates out there but he is stuck with ANZ due to some other reasons.
Thanks guys any feedback will be appreciated
Go for fixed rates. It's just 1 year so variable rates are unlikely to go below your fixed rates. And even if construction really takes 6 months, there will be still plenty of work to do on the property to improve before you want to do bank valuation for refinance.
I think 2.09% fixed for 1 year is great.