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Understood about moving lenders. Okay to stick it out with current lender for the next few years. But as per current policies and vals coming fine, do they allow for equity top up and re-draw?
Can't control the lender policy....
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yes, if nothing changes then no probs, a fixed rate loan cant be topped up, but a new add on equity loan can usually be taken
ta
rolf
Because people are always pre-occupied with the interest rate - when that is, in my humble opinion, only a secondary consideration for an investor. First priority is always access to funds.
If you want certainty, then fixing is fine. As I've said many times in this thread, there is a large pre-occupation with getting the 'optimal rate' which is nonsense in my view. Maybe it is my own bias but I prefer flexibility over rate certainty any day of the week.
A few bps of difference to a rate is irrelevant.
Skater - 100 bps (1%) is not 'a few bps'.
OK, maybe that's a little extreme. But the point is, that it COULD happen. In fact, it HAS happened if you go back over time. Yes, we have low rates at the moment, but there really isn't any certainty that we will continue on low rates indefinately. I remember 17.5% interest rates, and I'm telling you that it HURTS.
Except 17.5% can't happen again.
In fact the more price inflation we have in houses and the more housing increases as a percentage of income the less fluctuation we can have.
Peoples 17.5% interest rates hurt no more than the interest rates at 8.5-9.5% before the GFC, the houses were cheaper and there was a smaller percentage of income being spent on them.
Who says it can't happen again? I would hope that it doesn't, but that does not mean that things won't change at sometime in the future. I don't have a chrystal ball, do you?
And you are wrong! They hurt a heck of a lot MORE than the recent 8.5-9.5% rates. At 17.5%, I only had a PPOR. More recently I had over a $1mil in borrowings at the high rates. Neither were nice, but the 17.5% was the one that caused real pain. I was there through both of them. Were you?
The younger generations seem to think that things were easy back in the 80's. Yes, housing was cheaper, but incomes were also a lot less as well. As a percentage of income, expenses for food, clothing, furnture and cars were more too. It was not all sunshine and roses.
That's about right. Interest rates in high double digits , combined with today's debt levels would = absolute catastrophe for the majority.
Be interesting to see how things pan out for those who go to break the fixeds inside of the term and how / if banks work out the break costs.