5 year fixed rates thread

Yes Home Loans - 5 years fixed @ 6.21% pa, now in second place!

and...

Yes Home Loans - 4 years fixed @ 6.07% pa, now the leading four year rate it seems.
 
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boomtown said:
If I read Buzz's post properly recovery has been pushed back from mid 09 to early 10. This is a significant change.
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...or is he saying the bottom will be sooner, in June 09 instead of August 09, and that it will bottom at 2.585% rather than 2.315%?
 
David Koch joins the lock for 5 year crowd!

Hi Guys,

Seems our strategy of locking for the medium term when rates bottom in a few months is attracting some "expert" support. David Koch has jumped on the bandwagon and is advocating this as a smart strategy:

Lock in the low rates

David Koch said:
What it means is that official interest rates will continue to fall, as expected, over the next six months - quite sharply. For those who step back and look at the big picture, the continued slashing of interest rates could produce some long-term opportunities for those people who think it through.

*edit*

If, as predicted, the Reserve Bank cuts official interest rates by up to another percentage point during this year, that could see five-year fixed-rate, fixed-term home loans dropping to just over 5 per cent, which historically is an incredibly low figure.

My theory is this: the financial crunch that has sent banking sectors and economies teetering to the brink has resulted in governments having to provide massive rescue and economic stimulus packages. Central banks around the world, which for years have been vigilant in keeping inflation under control, have slashed official interest rates to do their bit to kick-start economies and have totally ignored any sort of future inflationary impact.

While no one can dispute the actions were needed, you can't help thinking that when economies right themselves over the next two years inflation will also come storming back. Central banks will then need to abruptly reverse their current strategy and increase interest rates as they once again focus on bringing inflation under control.

Just the sheer size of government spending tends to make you think that when inflation comes back it will come back with a vengeance and you may see home loan rates back in double digits. History could show that locking in at about 5 per cent for five years in a fixed-rate, fixed-term home loan could be an absolute bargain and a life saver for those with high mortgages.
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A lot of that echoes the thoughts of myself and others here who suggest the current credit crunch and economic slowdown presents an excellent opportunity to lock in rates at low levels before the enormous government stimulus trillion dollar packages see a resurgence of inflation in a few years time.

Bring it on, I'm ready for those 5 per cent for five year rates! :D

Cheers,
Michael
 
Yes the trick for me will be to take advantage of the variable for as long as possible and pick the right time to fix. If the variables get to 3% or 4% I can do some serious damage to the extra debt we had to accrue last year to stay afloat so interesting times are ahead methinks!

When I met with the area BDM for St George last week for work I gave her the heads up on what investors are waiting for and she took it back to HO, apparently they are very keen on grabbing a bigger market share so maybe they will lead the charge!
 
Firstly, Bankwest 5 years fixed at 6.59% pa (INCREASED)...WTF? (noted in another thread)

And now...

Yes Home Loans 4 years fixed at 5.96% pa, and 5 years fixed at 6.10% pa.
 
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MichaelW said:
Bring it on, I'm ready for those 5 per cent for five year rates! :D

Cheers,
Michael
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I hope fixed rates get that low but my gut feeling is that they won’t. Just a word of warning to people - don't get too greedy. Don't wait for a probably unrealistic fixed rate. If you can, hedge your bets. I would start locking in when/if 5 year rates fall below 6% (which is well below the long term average variable rate). If fixed rates continue to fall, lock in more. The problem is that fixed rates could move up quickly at some point and you don't want to miss the boat.
 
StuartW said:
I hope fixed rates get that low but my gut feeling is that they won’t. Just a word of warning to people - don't get too greedy. Don't wait for a probably unrealistic fixed rate. If you can, hedge your bets. I would start locking in when/if 5 year rates fall below 6% (which is well below the long term average variable rate). If fixed rates continue to fall, lock in more. The problem is that fixed rates could move up quickly at some point and you don't want to miss the boat.
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Is there a way where you can put 50% fixed for x% and the other half fixed again at y%???

LOL
 
boomtown said:
Yes you can part fix now if you want.
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What he said. :)
Was speaking with my MB this morning about this exact thing. Just split the loan into a few different accounts & fix parts at different times. Theoretically this spread could be seen as a loss minimisation strategy rather than a profit maximising strategy. If you have a large loan facility it may help your SANF to have parts of the loan come off fixed rates at different times. Similarly, when I last fixed rates I fixed one loan for 3, one loan for 4, one loan for 5 years.
 
looks like all those who took westpac 3 year 4.99% fixed special are not been shafted....

you will miss the opportunity to fix when the rates turn around and will have your loan exiting into the up cycle.

Plus further rate cuts will be missed out on now... market expecting a further 1% drop before this discounting cycle turns
 
After the latest 1% cut announcement, how long does everyone think it will take before the banks start reducing their fixed rate loans?

I'm hoping for a 5 year fixed with ANZ at least in the low 6's and anything lower will be a bonus.
 
I still say a 5 with 5 is doable and a 4 is not an impossible dream.

Poor Kochie is, as MW said, jumping on the band wagon:rolleyes: I seem to remember him saying "property is doomed, sell up now" six months back. My have we have changed. I predict his nect prediction will be "buy now".:p

AND yes....It is starting to turn in the property market. A very close contact I have in the developer game said today, two months back they had no calls for quotes. Now they are flat out quoting new stock.

A property lead recovery is looking more and more likely. Like the Boom of 1990 after 1987, we may well have the Boom 2011 after 2008.

And on that point I will agree with Kochie when it does recover we could well see inflation and high rates return quickly. So I am starting to consider locking for 7 to 10 years. It will be more % but the numbers and peace of mind may well stack up.

My 2 cents, Peter 14.7
 
I can get 6.15% 5 yr fixed IO on my 2 mill business loan(not secured by residential) today. Starting to look tempting. Anyone else have experiences with this type of finance?
 
Have a look in today's newspapers as to what the banks are prepared to pay for three year term deposits.

Ask yourself what it might saying about where they think rates will settle.
 
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