3 & 5 Year Fixed Rate Trends

[MichaelW]

And this in the media today...

Euro investors eye local property market

European investors are lining up to plough money into Australian mortgage securities as the strength of the local housing market attracts international attention.

Non-bank lender FirstMac said European fund managers want the federal government to consider supporting euro-dominated investment into local mortgage backed securities.

Nice... Some low rate competition for the big 4.

The risk of course, is that cheap rates will result in a genuine property bubble. That's alluded to at the end...

''The process by which this can happen typically starts with a country, for one or more reasons, becoming attractive to foreign investors,'' said RBA deputy governor Ric Battellino. The country then allows in a flood of capital that overwhelms the capacity of the economy to use it productively, he said.

''This type of crisis can occur even in highly sophisticated economies, as illustrated by the recent subprime crisis in the United States.''

i.e. That flood of capital with lowered lending standards resulting in an asset bubble. If this does happen then ride the wave for as long as you dare but be aware of the potential medium term impact when it washes out.

As an investor, not a speculator, I'd rather rates remained higher to stave off any speculative investment with poor lending standards. Current prices are very sustainable. But a true bubble which could eventuate if we're flooded with cheap offshore capital would mean longer term heartache for some who aren't in already or lever up through the bubble. Some offshore competition would be good but not if it resulted in a significant drop in lending standards.

Still, a rapid doubling in prices from today would be nice...

Cheers,
Michael

 

[Ms Jade]

Looks like St G have raised (today?). 3 yrs now 7.84!

 

[bradje]

I wonder where the money from Europe would come from? News I've been hearing is that many European countries are worse than broke and much more bad news to come.
Some of the money I'm seeing come in to the market is Indian and Chinese. Now that makes more sense.....
i wonder where they get their figures from at SMH?

JB

 

[JIT]

Looks like St G have raised (today?). 3 yrs now 7.84!

Ms Jade,

On 24/5/10, the St. George 3 year fixed rate was 7.84% pa on their website (see my post #2).

 

[JIT]

Medium-term fixed rates falling

Current 3 year fixed rates:

WBC 7.39% pa (DOWN)
CBA 7.44% pa (DOWN)
NAB 7.69% pa
ANZ 7.52% pa (DOWN)
St George 7.84% pa
Bankwest 7.64% pa (DOWN)
RAMS 7.23% pa (DOWN)

Current 5 year fixed rates:

WBC 8.14% pa
CBA 8.04% pa (DOWN)
NAB 7.99% pa
ANZ 7.94% pa
St George 8.19% pa
Bankwest 8.09% pa
RAMS 7.99% pa

Note: these are the current advertised rates listed on each banks' website, before any discounts apply

 

[Ms Jade]

Thanks, JIT. I think i assumed it must have been up as it seemed so high cf: the 6.99 for 2 yrs.
I did notice yesterday that 2 & 3 yr rates for RAMS both down. it's starting to look interesting... I would love to see 5 yr rates around 7 but i think if 3 yr rates get there (seeming believable) i will probably lock away.

 

[JIT]

No problems Ms Jade.

WBC is actually 7.19% pa after their standard 0.2% pa discount, so the closest to a sub-7, 3 year fixed rate at this stage.

If anyone has any other (notable) banks that I have missed that they would like me to track, let me know and I can add it to the watchlist, and update it every few weeks, and more often as it gets more interesting.

Thanks.

 

[JIT]

Hi All,

I have some good news to report, www.interest.com.au has moved to the following address, and this will have up to date fixed rate movements listed here (including 4 year fixed rates):

http://www.interestratenews.com.au/full_doc_mortgages.php

http://www.interestratenews.com.au/fixed_mortgages.php

With charts for interest rate trends, including fixed rates:

http://www.interestratenews.com.au/charts/chart_mortgage_rates.php

 

[JIT]

BUMP!

Um... looks like they're going the other way now!

A few of the big banks seem to have increased their 3 and 5 year fixed rates in recent weeks...

 

[Intrinsic_Value]

BUMP!

Um... looks like they're going the other way now!

A few of the big banks seem to have increased their 3 and 5 year fixed rates in recent weeks...

if you add in 25 basis points for next months RBA increase, plus 20 basis points additional for the banks how do they stack up?
also consider that its expected that at least one more additional RBA increase of 25 basis points will be in play within the next 12 months.

 

[redwing]

Hi All,

I have some good news to report, www.interest.com.au has moved to the following address, and this will have up to date fixed rate movements listed here (including 4 year fixed rates):

http://www.interestratenews.com.au/full_doc_mortgages.php

http://www.interestratenews.com.au/fixed_mortgages.php

With charts for interest rate trends, including fixed rates:

http://www.interestratenews.com.au/charts/chart_mortgage_rates.php

First Link took me to Bartercard

last link showed the variable trend

 

[MichaelW]

Here ya go...

http://www.interestratenews.com.au/full_doc_mortgages.php

Still a fair few out there under 7% for three years. My bank, WBC, just went up and a lot of others are following suit. I've applied to fix mine for 3 years at 6.99% with WBC and I think I got in the day before they went up. Time will tell though, because my banker didn't lodge the application until the day after they went up and now it has to go to some internal mob for approval first.

7% for three years sounds good about now. Variable rates are about 6.7% and will go up .5% either this month or next and continue upwards for the foreseeable future. I think anything sub-7's is safe for three years. Don't know what the environment will be like then but its a good chance they'll come off fixed into a high interest rate environment, but I'll cross that bridge when I come to it.

Cheers,
Michael