3 and 5 year fixed rate thread
- Thread starter lizzie
- Start date
Doubt it
There is reasonable logic that the economic break cost should be less than now, but its not a strategy I would recommend because there are too many what ifs
ta
rolf
It will mean that your break cost is less but not $0. It is a formula they use, the inputs of which are not known.
Obtaining a higher borrowing capacity due to the current low rates then using it to maximise ones asset base would be my focus.
Even after completion of the asset accumulation phase of my portfolio I would be using the current climate to top up LOC/s and maximising access to further funds. You dont pay for the funds until such time as you draw down and use them - whether for business, investment or lifestyle.
Last edited:
Just hope you don't plan to acquire anymore properties as you cant leverage off equity with this lender
Just hope you don't plan to acquire anymore properties as you may struggle to leverage off equity with this lender
Will rates go lower? Wont they? And if they do go lower, how much lower will they go, and how quickly? You'd really need the RBA to reduce rates by another 50 basis points in order for most lenders to pass on 40 points. And you'd need about a 40 point reduction against today's (discounted) variable rates to start to get in line with or below most the 2 and 3 year fixed rates currently available. AMP just did a deal for me at 5.09% for 2 years!
And then, even if the RBA dropped by 50 and the banks passed on 40 and you were "ahead" for a while, how long will rates stay low? Will they hold that low for 2-3 years , or will it only be temporary, with rates slowly climbing to mid 5's and 6's again?
Crystal Ball stuff really, but the 2 and 3 year rates that are available right now are certainly very attractive. A fairly strong case can be made that the downside risk of fixing investment debt for 2-3 years at the moment is pretty low.
And then, even if the RBA dropped by 50 and the banks passed on 40 and you were "ahead" for a while, how long will rates stay low? Will they hold that low for 2-3 years , or will it only be temporary, with rates slowly climbing to mid 5's and 6's again?
Crystal Ball stuff really, but the 2 and 3 year rates that are available right now are certainly very attractive. A fairly strong case can be made that the downside risk of fixing investment debt for 2-3 years at the moment is pretty low.
Hi euro73
How did you manage to get the 5.09% rate with AMP? I heard they "don't negotiate" rates at all.
Thanks
la mouette
That's the advantedge money if you fix under 50% of your loan for 1 year.
You are right, they won't negotiate at all. I threatened to take my business elsewhere, it didn't make any difference. I even asked to speak to the manager - another firm "no".
OK - thanks everyone. I've been looking at AMP's 2- and 3-year fixed rates of 5.14%, which I'd be happy with. But my eyes perked up at the 5.09%!
not even for like 1 million plus
ta
rolf
This deal was 200K. I guess I must be an exceptionally lucky or skilled or flukey negotiator
