I thought I would post a thread in response to the general bewilderness and frustration to the recent rate hikes. Especially to Westpac which is fast becoming the "W" word.
Your risk and exposure to a bank higly depends on your loan structure and debt with that particular bank.
If you are worried about interest rate rises: Lock your rates in at a level you can afford.
If you are worried about accessing your equity when you really need it - for whatever reasons: Don't Cross-Collateralise your properties.
Sash has indirectly mentioned a risk strategy that I personally use and I don't think enough people realise it. Especially those new to Investing.
If the interest rate rise by one bank can affect you so acutely, you should not be with one bank.
Mix your banks up and use non-banks. There are many Credit Unions and Building Societies that still offer competitive rates, not to mention banks such as RAMS, ING and Suncorp that offer competitive rates and products.
Some of you may argue that many non-banks are owned by the BIG 4 anyway, but I will argue that they still operate independantly and individually. Servicing criteria is still seperate and so are Interest Rates.
Diversify your lenders and raise some competition to the Big Banks.
Regards JO
Your risk and exposure to a bank higly depends on your loan structure and debt with that particular bank.
If you are worried about interest rate rises: Lock your rates in at a level you can afford.
If you are worried about accessing your equity when you really need it - for whatever reasons: Don't Cross-Collateralise your properties.
Sash has indirectly mentioned a risk strategy that I personally use and I don't think enough people realise it. Especially those new to Investing.
If the interest rate rise by one bank can affect you so acutely, you should not be with one bank.
Mix your banks up and use non-banks. There are many Credit Unions and Building Societies that still offer competitive rates, not to mention banks such as RAMS, ING and Suncorp that offer competitive rates and products.
Some of you may argue that many non-banks are owned by the BIG 4 anyway, but I will argue that they still operate independantly and individually. Servicing criteria is still seperate and so are Interest Rates.
Diversify your lenders and raise some competition to the Big Banks.
Regards JO