The choices are:

variable rate at 7.57%

or

variable rate at 6.97% with monthly fee of $8 (so works out about the same)

:wacko:

Some banks will waive the monthly fee if you have a salary paid into your account. Try and push for it.

Which lender is the 6.97% ?

$100,000.00 at 7.57% = $630.83 Interest per month
$100,000.00 at 6.97% = $580.83 Interest per month

A difference of $50.00 per month, per $100k

They are both ANZ, we will be borrowing $90,000 over 20 years, although plan to make regular overpayments to pay it off earlier.

7.57% with no fee = $567.75 per month in Interest
6.97% with $8 fee = $530.75 per month in Interest

I'd say the 6.97% would be best

$90,000 at 6.97% over 20 years, with $8 per month charge would take 240 monthly payments of $704.15 to clear it

Paying the same per month on 7.57% with no charges, would leave a balance of $13,818.26 still outstanding, after the same period.

Please get these figures checked. I have been known to stuff up recently :D

I suggest you get the ANZ to confirm their figures for the above examples.

Thanks ABCD I will take another look also :D

Hmmm, interesting becuase with fornightly payments it works out as:

6.97% = $324.55 + $4 therefore $328.55
7.57% = $334.98

So only a $6.43 difference, although of course if you paid off an extra $10.43 per fortnight against the 7.57% I guess the loan would disappear quicker and you'd pay less in the long term.

Oh dear, I do find figures a bit :wacko:

How about if I said: we will pay $350 a fortnight off, so which is more beneficial, would it be the 6.97% one still even with the fee?

Have you tried looking AT THIS?

There's a calculator which allows you to play around with figures etc.

Are you tied to ANZ?

http://www.sapphiremortgageservices.com.au/index.asp - from 6.54%

http://www.virginmoney.com.au/default.cfm?flash=1 - 6.84%

If you play with the loan repayments calculator I posted - you can put all sorts of figures in and see how much quicker you'd be able to repay the loan.

Have fun. :lol:

20 years at $328.55 p/f = $170,846.00
20 years at $334.98 p/f = $174,189.60

the difference is $3,343.60

I am pretty sure that the 6.97% option would be the better one.

Paying at $350 p/f would be 447 fortnights at 6.97% +$4 per f/n
but 476 fortnights at 7.57%

I can't guarantee my figures, something does look wrong, but not sure what, and running out of time now... :)

I think you're right ABCD, it would work out better long term..... :)

Marco, your calculator made my head hurt! :lol:

Oh it's not that bad - really.

It just shows you by how much you could reduce your mortgage by overpaying by $X each month/fortnight.

Just out of interest - is it a flexible mortgage allowing you to overpay and then borrow back the money as and when you might need it?

Yes, you can overpay as much as you want then borrow back a set amount, think we will probably pay between $350 and $400 a fortnight then make extra repayments as and when as we didnt want to sign up for too much in case Malc ends up on an apprentice wage.

We're going to stick with ANZ at the mo as we've got so far with them and want to get this drawn so Malc can look for another job (which will complicate things if he does before the mortgage is taken)

Thanks for your info though as always :)