5 year fixed rates thread

Andrew_A said:
From the following article: Lowest rates in 50 years

InfoChoice managing director Shaun Cornelius said about 40,000 customers rushed to lock in loans as fears rose last year about rates rising above 9 per cent. But if they now tried to refinance, some of those customers faced loan-break costs of $45,000 or more. "Both variable and fixed rates are pretty low but the three- to five-year fixed rates have been drifting up, so it may be that the best time to fix is now," Mr James said.

What evidence is there of the fixed rates drifting up?

A great example of how many people are caught leaning the wrong way at important turning points I thought, I remember the pressure to fix in 08 and am glad I was able to copper the public here and not fix, using my faster runner and the lion analogy and a coming recession. Silly or not I'm still 100% SVR. However there is a great fixing point coming soon enough perhaps?
Click to expand...

Andrew, Bankwest's 5 year fixed rates have increased twice in the last one month. That's the only evidence I have of fixed rates drifting up. But I have not seen an upward move in the 5 year rates from any other notable bank as yet...
 
Andrew_A said:
From the following article: Lowest rates in 50 years

InfoChoice managing director Shaun Cornelius said about 40,000 customers rushed to lock in loans as fears rose last year about rates rising above 9 per cent. But if they now tried to refinance, some of those customers faced loan-break costs of $45,000 or more. "Both variable and fixed rates are pretty low but the three- to five-year fixed rates have been drifting up, so it may be that the best time to fix is now," Mr James said.

What evidence is there of the fixed rates drifting up?

A great example of how many people are caught leaning the wrong way at important turning points I thought, I remember the pressure to fix in 08 and am glad I was able to copper the public here and not fix, using my faster runner and the lion analogy and a coming recession. Silly or not I'm still 100% SVR. However there is a great fixing point coming soon enough perhaps?
Click to expand...

You are right and there is not much of direct evidence, the rising yield of government bond of 3 or 5 or 10 year is not a direct evidence and not necessary will lead to higher fixed term mortgage rates.
But even if banks rise those yield a little doesn't mean the bottom was reached, and those yield would still be higher then the variable rate
 
I'm fixing today before the rise. IMO from here on out, the upside is in the rent increases - no longer in the interest rate decreases, for our portfolio anyway.

Pretty happy with the result - unlocked the 7.64% rates last year and relocking at 5.6%.
 
steveadl said:
I'm fixing today before the rise. IMO from here on out, the upside is in the rent increases - no longer in the interest rate decreases, for our portfolio anyway.

Pretty happy with the result - unlocked the 7.64% rates last year and relocking at 5.6%.
Click to expand...

who is at 5.6% for 5 yrs that is a genuine rate??

cheers
 
JIT said:
Andrew, Bankwest's 5 year fixed rates have increased twice in the last one month. That's the only evidence I have of fixed rates drifting up. But I have not seen an upward move in the 5 year rates from any other notable bank as yet...
Click to expand...

Bank West released its results today for the year to 31 December 08 showing a LOSS of $139 million mainly as a result of an increase in provisions for bad/doubful debts to total 1.5% of gross loans written.

Now remember CBA bought out Bank West in Dec08, the final purchase price is determined by Bank Wests final capital position and movement in provisions as at June09 (ie two months time)

CBA has also stated that since taking over Bank West it has restored it to profitability.

So reading between the lines here you can see why the banks are moving to increase interest rates, they have to take into account the increased risk of lending as well.
 
Bendigo/Adelaide Bank lifted their 5 year fixed rate yesterday from 6.39% to 6.64%

Recent History (based on Adelaide Bank rates):

4/11/08: 7.39% (start date of my regular tracking)
12/1/09: 6.99%
29/1/09: 6.49%
27/3/09: 6.39%
30/4/09: 6.64%
 
JIT said:
Was anyone watching NAB's fixed rates?

Did they just DECREASE it to 6.09% pa for 5 years?
Click to expand...
It'll be v. interesting to see how long the NAB rate lasts or if the others follow. It may be that NAB has got a chunk of cheap money, or is buying market share, or it may be that wholesale lenders are accepting a lower risk premium.
 
perky29 said:
Yes, it was 6.29% for 5 year fixed last week. The 4 year remains at 6.09% , like last week.
Click to expand...

A crack in the banks positon? Will we see 4 years at under 6%?

Has anyone else noted there seems to be a pattern to drop rates the week the RBA meets and a drop appears likely?

Peter
 
St George increased their 5yr rate from 5.94% to 6.34% as of today
Have we seen the bottom of the fixed rate cycle :rolleyes:
Pretty happy that I locked in some of my Adelaide bank and STG facilities a couple weeks back :D

Ross
 
keithj said:
I thought a drop was looking less likely...
Click to expand...

But not off the cards:

House price, job ads decline revive pressure for rate cut

Business Spectator said:
The TD Securities-Melbourne Institute inflation gauge was flat in April, dragging annual inflation down to 2.1 per cent from 2.6 per cent the month before. That was the lowest since May, 2005 and at the bottom of the RBA's two to three per cent target band.

"The recession is crushing pricing power," Annette Beacher, senior strategist at TD Securities, said.

"On economic grounds, there is nothing standing in the way of the RBA board cutting interest rates at its meeting tomorrow.

"There seems little doubt that rates are on track to get to two per cent in the second half of 2009."
Click to expand...

And anyone who thinks the economy is out of the woods just yet might be being a tad optimistic. We're at the front end of the ensuing recession with most of the pain yet to be felt IMHO.

Interesting times.

Cheers,
Michael
 
Ross said:
St George increased their 5yr rate from 5.94% to 6.34% as of today
Have we seen the bottom of the fixed rate cycle :rolleyes:
Pretty happy that I locked in some of my Adelaide bank and STG facilities a couple weeks back :D

Ross
Click to expand...

Yeah even if we haven't, I think it's ok to apply and get in progress with a rate lock. We have rate locked St george's old rate for 90 days. The full approval will take 6 weeks with their slowness (I don't mind at all!). And then we will delay returning documents to get the full 90 days.

During that 90 days we enjoy low variable rates, and if fixed rates do drop, we get them. If we change our mind, we don't have to pay rate lock because it's only charged when the loan is settled up!! :D

If you were really trying to get a good rate, then during the 90 days, look around and if a cheaper "special" comes up with another bank you can take that instead! Or ask your current approved bank to match it - easier for all.
 
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