Can you see banks raising interest rates?

[devank]

Apparently ANZ is going to increase their fixed rate tomorrow! Any one can confirm that?

 

[Mick C]

Apparently ANZ is going to increase their fixed rate tomorrow! Any one can confirm that?

Not 100% sure---- BUT I wont be surprised

 

[Aaron_C]

What's the big deal about fixed rates? It mystifies me...

 

[Intrinsic_Value]

Marty, the banks are issuing notes between 7 and 8%.

exactly, why are few other people looking between the lines.

Why would you be issuing notes at 7-8% as you stated if it was easy to borrow and lend.

Banks are in the business of making profit, and to be honest when it comes to these straight differentials, they are a hell of a lot smarter than 99.99% of people on somersoft.

The key at the end of the day is underlying net average borrowing costs, some cheaper, some more expensive, and duration of term must also be considered. With these notes, they have your money for a while, its not short term. But still they are paying these rates.

Now what were these institutions paying 5 years ago? not the raw rates, but the rate above RBA rates?????

 

[devank]

What's the big deal about fixed rates? It mystifies me...

I don't have enough knowledge to understand the rate movements or economics behind it.
So.. this is my simple theory. Fix 1/3 to 1/2 of loans if
- the fixed rate is lower than the var
AND
- the bank is going to increase their fix rate

 

[Aaron_C]

I don't have enough knowledge to understand the rate movements or economics behind it.

No what I don't understand is people's obsession with whether their fixed rate is 0.01% cheaper than the advertised rate and whether it is the 'best' time to fix. I just don't see the point when investing, in property or otherwise, is a fluid strategy and to lock yourself into a fixed rate is like putting on a straitjacket.

 

[belleran]

Have been trying to get a meeting with my broker to fix a loan with ANZ @5.8% with Breakfree package for about two weeks. I walk in this morning and rates have gone up today 5.99%. Then he says I have a choice of having a rate lock for $700 in case it goes up again during the three week application period - I don't see fixed rates charging ahead enough to warrant a lock in fee. Can applications be done faster than three weeks?
I still think locking in under 6% is a fairly sensible option. Above that and I am happy with variable.

 

[Rolf Latham]

Have been trying to get a meeting with my broker to fix a loan with ANZ @5.8% with Breakfree package for about two weeks. I walk in this morning and rates have gone up today 5.99%. Then he says I have a choice of having a rate lock for $700 in case it goes up again during the three week application period - I don't see fixed rates charging ahead enough to warrant a lock in fee. Can applications be done faster than three weeks?
I still think locking in under 6% is a fairly sensible option. Above that and I am happy with variable.

ANZ are problematic for a number of reasons, their current IO to IO anything process is painful, with a full loan app needed in most cases.

3 weeks is long

t
arolf

 

[bdc]

ANZ are problematic for a number of reasons, their current IO to IO anything process is painful, with a full loan app needed in most cases.

3 weeks is long

tarolf

I find it quite odd the way re-financing with them works.

I bought my house just under 2 years ago and want to change my loan from PI to IO and fix it, my parents are guarantor on the loan (owe $250k, bought the house off the plan for $275k) and they had their house valued for 400k when I got the loan (they have 70k equity left in it before they hit 80%).

I really don't understand where this sort of stuff comes from, my position is much stronger than it was when I got the loan (I earn over 10k more pa, I have paid down the debt somewhat) and my parents obviously owe less than they did, and earn more too.

And house prices have been flat (slight growth and slight loss for flat over the 2 years) for the city.

I'm not worried about the valuations or anything, but it just seems to be a waste of time...they are only "drive by valuations" so I assume this just means that they put the data into a computer anyway? Maybe use streetview ; D (though my parents are on 25 acres, so no luck there).

 

[Aaron_C]

For a refinance they would usually require a valuation. Some lenders do a 'desktop valuation', others require a full valuation. I personally hate desktop valuations because they use data which is just wrong and gives a nonsensical result.

 

[BayView]

No what I don't understand is people's obsession with whether their fixed rate is 0.01% cheaper than the advertised rate and whether it is the 'best' time to fix. I just don't see the point when investing, in property or otherwise, is a fluid strategy and to lock yourself into a fixed rate is like putting on a straitjacket.

Quite right.

A mix of fixed and variable is probably the best bet for most.

The other thing about the fixed rate mantra is not to get too obsessed with being absolutely right about the best rate and at the best time.

I liken this (preferred) mindset to the the quote by I think it was Rockefeller; "I made a fortune out of buying too late and selling too early."

So, this means that as long as you are in the game and are looking to lock in at a time when the time is looking good, and when the rates are looking good, it doesn't matter too much if you weren't perfect with either factor.

 

[Rolf Latham]

not to get too obsessed with being absolutely right

That little snip is worth sooooooooooooo much in life in general as well as the context here .

ta
rolf

 

[Tehanu]

We can add the Bank of England to the list of central banks (ECB, RBA) losing control of mortgage rates.

http://www.bbc.co.uk/news/business-17234257

The UK's biggest mortgage lender, the Halifax, is expected to raise its standard variable mortgage rate (SVR) from 1 May.

The Halifax said the rise - from 3.5% to 3.99% - was due to the higher cost of raising funds for mortgages from both savers and the financial markets.

On Friday, RBS raised the rate on two of its mortgages from 3.75% to 4%.

This affects 200,000 borrowers with RBS and NatWest offset mortgages and home loans from RBS's One Account range.

The changes come just a few days before the third anniversary of the Bank of England cutting its bank rate to a historic low of just 0.5%.

It argued that its hand had been forced by market conditions.

"The change acknowledges that the cost of funding a mortgage in today's market remains significantly higher than the longer term average," the Halifax said.

"The increase to the rate reflects the fact that raising money through retail savings and in the wholesale markets is currently very expensive by historical standards."

Consumer groups have reacted angrily to the news.

"It's shocking, it's coming at a time when people need this thing least of all," said Marc Gander, founder of the Consumer Action Group.

"Banks have never had it so good. They are doing fabulously well and it amazes me that they can't decide to share some of the burden that the rest of us are sharing.

I really don't think the Australian banks are lying here...