5 years or 3???

[voodoo]

Hi,
After 3 years of having a fixed rate of 6.39% on my IO IP the day has come for me to make the decision again.
Due to my tight budget and limited cash flow variable is not an option as the LOC makes the rate to high.

So my mind is made up to fix at 6.59%, But should I go 3 years or 5 years??

My thoughts are that I fixed on 6.39% 3 years ago and property was booming, rates were low and 6.39 was the best I could get. I cannot see it getting any lower than 6.5% in the next few years.

anybody have any opinions on 3 or 5 years.

cheers

 

[Rixter]

Due to my tight budget and limited cash flow variable is not an option as the LOC makes the rate to high.

Voodoo,
Can you explain above? I'm not aware a LOC could be fixed?

If your cashflows are tight like you say, and youre comfortable with the rate @ 6.59% then why not go 5 years. It gives you peace of mind and SANF knowing they wont be higher for that period.

If rates do go up youre ahead, if they remain steady or go down slightly then think of the extra your paying being fixed as an insurance premium that provides you emotional peace of mind.

Rental incomes will increase your cashflows to offsett and improve any differences over the time anyway.

Cheers

 

[voodoo]

Hi Rixter,

I have a portfolio LOC. The fixed one is a sub account and it will go onto the same rate as the portfolio, 7.4%
I found out last week that I am eligable for the professionel pack rate around 6.9%. So i will probaly fix the sub acc at 6.59 for 5yrs and change the PPOR to the pro pack rate of 6.9%
cheers

 

[Rixter]

Sounds great voodoo.....If it works for you & your comfortable with it then why not??