Dear Diary...

[knightm]

Dear Diary...

(This is for my own referencing in future years. Feel free to ignore, or comment, its up to you. )

"Its March 2015, you just fixed 2 loans at 4.49% for 5 years. In the future you will come to regret or celebrate this decision. In fairness, it seemed like a good idea at the time, and you had no intention of selling either property. St George had only recently dropped their 5 year rate and you didn't see it getting much better. You figured rates would do the dead cat bounce down or flat for 2015 and then sometime in 2016 start a gradual rise for the following 3-5 yrs. You were not an economist, but you made a decision and now you have to live with it.

Was it worth it? Please let me know in 2020.

Hindsight is great huh?

Now to get working on that time machine to find out..."

PS if you got it wrong, suck it up princess.

 

[pinkboy]

Clever.

Whilst you'll never beat the bank, I hope the decision turns out good for you!

pinkboy

 

[WattleIdo]

I fixed at 4.49% for 3 years a year ago and am still very happy with it. Haven't seen anything bona fide for better than this yet - except your 5 year term.
I doubt you'll regret it.

 

[Biz]

I fixed 2 years ago for 3 years at 5.29% doh!

Seemed like a good idea at the time

 

[spludgey]

Got 5.49% and 5.39% coming off fixed later this year, it'll save me between $5k and $10k a year (depending on what the RBA does in the meantime).

 

[Shahin_Afarin]

I think lenders will do another round of drop in fixed rates in about 5-6 months.

 

[albanga]

I'll say it once and I'll say it again, don't think I've ever heard someone in a long time FINANCIALLY better off fixing rates.
Now I'm sure someone will say they have, but the percentage of them versus those that have been worse of would be tiny.

I know the whole other debate about certainty, minimizing risk, sleeping easier at night.etc but I am talking purely based on a financial decision and I reckon most people do it for that aspect.

 

[spludgey]

I'll say it once and I'll say it again, don't think I've ever heard someone in a long time FINANCIALLY better off fixing rates.

That's usually the case when interest rates are falling, which they have been doing for some time. But once this trend is reversed, people could benefit.

 

[albanga]

That's usually the case when interest rates are falling, which they have been doing for some time. But once this trend is reversed, people could benefit.

No doubt but hence why I said "long time".
Also given the current economic climate I have only ever heard about more cuts and potentially more again after that. Not a single thing I have read suggests rates will rise.

 

[Jamie M]

I fixed 2 years ago for 3 years at 5.29% doh!

Seemed like a good idea at the time

Don't worry - I locked in at 5.74% I thought they'd bottomed out....but nup.

 

[Redom]

You can get a sense for what's happening by tracking this:
http://www.afma.com.au/data/BBSW

As the swaps increase/decrease, if its lasting, generally passed on by the banks after a while. If it continues to head south, we may see further cuts. If it starts rising again, then we're likely to see increases.

As for the drivers, its all about what's happening in credit markets around the world. When Europe/Japan decides to pursue QE more aggressively, while the US decides to hold of raising rates for a year longer than the original timelines - rates remain low.

 

[Bhp19]

I still have one of my first props fixed at 7.19% until this time next year!!! What was I thinking?!?!?

 

[S.T]

I still have one of my first props fixed at 7.19% until this time next year!!! What was I thinking?!?!?

There was some bloke on here who fixed at a crazy rate for 10 years or something once.

 

[Bhp19]

There was some bloke on here who fixed at a crazy rate for 10 years or something once.

I still don't know how I got talked into it, inexperience I guess. At least it's the smallest loan I've got.

 

[jackbak]

You're taking a gamble fixing, the bank offers their fixed rates ABOVE what they believe the average will be over that time. Therefore the forecasters at the bank believe rates will average less than 4.49% over the next 5 years.

It's possible you'll come out on top, but chances are you wont.

 

[pinkboy]

There was some bloke on here who fixed at a crazy rate for 10 years or something once.

Richard Feynmann.

15 years!

He broke the fixed. Pretty sure there is a thread about it.


pinkboy

 

[jackbak]

Richard Feynmann.

15 years!

He broke the fixed. Pretty sure there is a thread about it.


pinkboy

Haha I think there's a few

 

[Richard Feynman]

Richard Feynmann.

15 years!

He broke the fixed. Pretty sure there is a thread about it.


pinkboy

Yep.

I listened to Dad's suggestion (good advice if you are super conservative and not planning on building a portfolio). I should have seen a mortgage broker but I was naive and didn't know the myriad benefits of doing so.

I copped a fat break fee and paid way above SVR interest for almost 3 years (total ?unnecessary? cost was about $44k I think) but I'm up a few hundred grand thanks to the investment properties I was able to pick up in the wake of breaking the loan and switching to interest only repayments. Well worth it.

Oh, and I negotiated a 0.33% rate discount with the lender for the life of the loan to soften the blow of the break fee.

 

[Richard Feynman]

There was some bloke on here who fixed at a crazy rate for 10 years or something once.

It was 8.09% for 15 years.

 

[see_change]

When you've paid over 15 % , 6 % seems like a bargain ... I mean they won't go lower than that ... Can they ??

Not long to go

Cliff