I believe it's now ING, CBA as well?
Fix Now or Wait ?
- Thread starter keithj
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- fixed interest rates
I believe it's now ING, CBA as well?
(see this thread http://www.somersoft.com/forums/showthread.php?t=51685)
its a worry, a real worry. I was expecting fixed rates to go up at some point but not as soon as now. A real cunundrum on whether to press the trigger. I still think things will continue getting worse or at least stay bad for at least a few months. No rhyme or rhythm why optimism is being built into the fixed rates.
Tell me about it! To fix or not to fix, that is the question.
Currently am on 5.11%, considering fixing 50% of loan with WBC for 6.09% for 5 years. (6.29% - 0.2% discount = 6.09%)
I don't want to make a rash decision here but the jump in fixed rates is really forcing me to act quickly which I'm not all that comfortable about. I was holding out for one more small drop in fixed rates before I fixed!
Currently am on 5.11%, considering fixing 50% of loan with WBC for 6.09% for 5 years. (6.29% - 0.2% discount = 6.09%)
I don't want to make a rash decision here but the jump in fixed rates is really forcing me to act quickly which I'm not all that comfortable about. I was holding out for one more small drop in fixed rates before I fixed!
The fact that the increases are synchronised is no surprise. And they're doing it because they can. I just wonder if they're taking advantage of recent media commentary by some brokers advising people to fix now.
One thing i've noticed of fixed rates over the years is that they trend up and down fairly smoothly ie if they're going up now, i don't expect them to drop them anytime soon and one could miss the boat...but that's presuming variable rates will rise independant of what the cash rate is.
Keithj could be right. The banks could shock everyone and start raising the variable rate as well shortly. I dont think they give a damn about bad publicity. The bottom line is all they care about.
A byproduct of this where rates go up but not because the economy is improving is a further drop in house prices as more people on the cusp roll over. Banks don't want a huge spike in foreclosures but in the end, I think in their mind, its a smaller price to pay than maintaining a small margin on the cash rate.
Gee, impossible decision.
One thing i've noticed of fixed rates over the years is that they trend up and down fairly smoothly ie if they're going up now, i don't expect them to drop them anytime soon and one could miss the boat...but that's presuming variable rates will rise independant of what the cash rate is.
Keithj could be right. The banks could shock everyone and start raising the variable rate as well shortly. I dont think they give a damn about bad publicity. The bottom line is all they care about.
A byproduct of this where rates go up but not because the economy is improving is a further drop in house prices as more people on the cusp roll over. Banks don't want a huge spike in foreclosures but in the end, I think in their mind, its a smaller price to pay than maintaining a small margin on the cash rate.
Gee, impossible decision.
So it's now Bankwest, NAB and soon to be CBA and ING who have all upped their fixed rates.
I think people here are now wondering whether this the real bottom or is it a dummy bottom?!
Who knows, oh well...that's the problem with trying to pick bottoms!
To me it would seem prudent to fix at least part of your borrowings now, eg. 30% (?pick a figure), which is what I'm in the process of doing...
Fixing say >50% of your borrowings now...I'm not so sure about that now?
And some of the 5 year rates are going from just OK (low 6's) to a bit ordinary (mid-high 6's)...
They're about to rise by ~0.4% ... if this is a false bottom do you think they'll fall by more than 0.4% next time ? What's the likelihood of any falls at all ?
The way I see it is that any further falls are a) unlikely & b) likely to be small..... OTOH, further rises appear to be the more likely scenario.
If your bank is amenable to paying you to break if fixed rates are higher then it's sensible to fix the lot.
Fair points...
I'm going to take a few more days to think about whether to fix up to 60% of my loans now, or fix only 30%.
The remainder (40%) is coming off fixed rates in Sept anyway, which I may leave at variable rates if the fixed rate boat has long gone by then...if it isn't then I've hedged by bets anyway.
What are others here planning to do with their loans......?
Anyone fixing everything now??
I have one loan fixed at 7% for another 3 years
. So happy i let the gloomers get in my ear about that one but hey its still not a bad rate if you look back a year or two.I have a PPOR loan that will be paid out in 2 years so thinking of locking for 2 years at 4.99%. Not really sure as i dont believe rates will hit the roof in that time anyway and if they did the remaining balance would be low anyway. So yeah i will have a think over the next week.
I was planning to wait until around May or so to see what happened. Seems as though the fixed rates are moving back up, rather than down further as we all thought might happen.
But who knows how far they will go up? Probably won't bother now if that's the case.
In the meantime, there is a good sign the variables will still stay down or even drop down a tad more if the job losses keep hitting the news each night.
In my case, because there is now such a decent gap between the fixed and variable on our loans, I'm sticking with the variables and will plow the difference back into the loans.
A year or two of variables for us, even if they go back up a bit later in the year (unlikely), will still be a lot less than if we fixed right now on a higher rate.
For those on high LVR's and low SANF, I'd probably be going the fixed option.
From past experience, in the half-dozen or so times we've fixed in the past, we were better off - and then only slightly - on only one occasion.
Have been on variable rates on all loans for well over 2 years now, so will stick to the variable and use the opportunity to further pay down our existing loans. LVRs are already quite low and there's lot$ of lovely equity built up when we are ready to make our next move ..... now, if only I could find something where the vendors had even halfway reasonable 'expectations'!
Cheers
LynnH
Have been on variable rates on all loans for well over 2 years now, so will stick to the variable and use the opportunity to further pay down our existing loans. LVRs are already quite low and there's lot$ of lovely equity built up when we are ready to make our next move ..... now, if only I could find something where the vendors had even halfway reasonable 'expectations'!
Cheers
LynnH
I've applied with Westpac today - the 5.19% 3 year fixed rate. I'm hoping to rate lock for as long as possible (90 days) til settlement. My fixed rate with St George matures a month later so I'm expecting the break fees for 1 month to be minimal (around $1-2k).
Anyone reckon its too late to get a loan application in and approved by Westpac at 5.19% for 3 years?? I'm quite nervous they'll bump it up by as much as a percent in the next week or two.
Anyone reckon its too late to get a loan application in and approved by Westpac at 5.19% for 3 years?? I'm quite nervous they'll bump it up by as much as a percent in the next week or two.
I too a so torn between fixing or staying variable. I have always been a variable sort of guy.. But i'm really considering fixing for a few years.
I am with ING and as you have seen, they are hiking their rates. HSBC have some good rates:
4.99% p.a (1 year)
5.20% p.a (2 years)
5.29% p.a (3 years)
5.80% p.a (4 years)
6.00% p.a (5 years)
Anybody use HSBC?
Ash
I am with ING and as you have seen, they are hiking their rates. HSBC have some good rates:
4.99% p.a (1 year)
5.20% p.a (2 years)
5.29% p.a (3 years)
5.80% p.a (4 years)
6.00% p.a (5 years)
Anybody use HSBC?
Ash
All this talk about fixed and variable rates is giving me a headache.
My view for what it is worth is that we have missed the fixed interest boat. Watching the small incremental increases and hoping it goes back down is futile and causes a lot of stress.
I seem to recall some study somewhere that found over the long term people invariably do better if they just stick with the variable rate (of course, you would negotiate the best discount package you possibly could; ie; .7, .8 or even .9% off the stated rate if you've got a large loan amount) rather than getting bleary eyed trying to second guess the fixed interest rates.
Oddly enough, I admit like anyone else I keep an eye on the fixed rates but only to check if some organisation has really gone mad and offered up a 3 year rate of 4%; then of course I would jump.
But as already observed on this thread, the current discounted variable rate is way way below any fixed rate, and given the variable rate will drag its feet I reckon for about another 12 months, then my suggestion would be to get the best discounted variable rate you can, and then fill your days with family matters, capuccino's, football games, etc, etc with only a very periodic look at the finance pages.
Big Rog
My view for what it is worth is that we have missed the fixed interest boat.
Watching the small incremental increases and hoping it goes back down is futile and causes a lot of stress.I seem to recall some study somewhere that found over the long term people invariably do better if they just stick with the variable rate (of course, you would negotiate the best discount package you possibly could; ie; .7, .8 or even .9% off the stated rate if you've got a large loan amount) rather than getting bleary eyed trying to second guess the fixed interest rates.
Oddly enough, I admit like anyone else I keep an eye on the fixed rates but only to check if some organisation has really gone mad and offered up a 3 year rate of 4%; then of course I would jump.
But as already observed on this thread, the current discounted variable rate is way way below any fixed rate, and given the variable rate will drag its feet I reckon for about another 12 months, then my suggestion would be to get the best discounted variable rate you can, and then fill your days with family matters, capuccino's, football games, etc, etc with only a very periodic look at the finance pages.
Big Rog
I seem to recall some study somewhere that found over the long term people invariably do better if they just stick with the variable rate (of course, you would negotiate the best discount package you possibly could; ie; .7, .8 or even .9% off the stated rate if you've got a large loan amount) rather than getting bleary eyed trying to second guess the fixed interest rates.
Big Rog
Marg Lomas did one and concluded that in the long term there was bugger-all difference in dollar terms.
The big difference is the SANF I suspect.
If someone was up to pussie's bow with repayments and worried by much higher rates, then it is a good idea for their (mental) health to fix.
Yup.
What are the chances of hyper inflation within 5 years & interest rates to match ? Probably small, but not zero. Could you withstand 17% IRs ? or even the 10% we had 12 months ago ?
By fixing I'm 100% certain I'll be able to withstand it, and it's likely that the insurance will cost me nothing.
We were hoping that the five (5) year rate would drop further with the latest and impending drops from the RBA, but as evidenced by many posts above that seems very unlikely
This may be as good as it gets for long term rates though, short term rates may drop further, but long term rates look done? We are looking to lock in a couple of loans and we also have a 6.99% (5 year) fixed rate loan due in late 2010, we intend to fix the others for 5 years when the economy actually starts to turn
Everyone seemed to be opting for variable rates only a few months back and now seem to be rushing back into fixed, as outlined in an earlier post will this rush actually cause the banks to increase those rates (3 and 5 year) and how many millions of dollars would now be “locking it in, Eddie”?
I read that Variable rates are influenced by the official cash rate (RBA), plus a retail margin for the bank, whereas Fixed rates are influenced by those investing in the fixed-rate wholesale markets (global lenders) plus the retail margin for the bank and a risk margin; is this push for fixed rates to rise also causing the rush to fix, which causes rates to rise and so on..?
On another note, can you split a mortgage between 3 year and 5 year fixed rates (Interest Cost Average for wont of a better term)?
The government (and not just ours) is throwing money about to stimulate the economy, if this eventually works then is inflation the next nasty genie still waiting to come out of the bottle, it’s a concern for us looking forward, how about others?
This may be as good as it gets for long term rates though, short term rates may drop further, but long term rates look done? We are looking to lock in a couple of loans and we also have a 6.99% (5 year) fixed rate loan due in late 2010, we intend to fix the others for 5 years when the economy actually starts to turn
Everyone seemed to be opting for variable rates only a few months back and now seem to be rushing back into fixed, as outlined in an earlier post will this rush actually cause the banks to increase those rates (3 and 5 year) and how many millions of dollars would now be “locking it in, Eddie”?
I read that Variable rates are influenced by the official cash rate (RBA), plus a retail margin for the bank, whereas Fixed rates are influenced by those investing in the fixed-rate wholesale markets (global lenders) plus the retail margin for the bank and a risk margin; is this push for fixed rates to rise also causing the rush to fix, which causes rates to rise and so on..?
On another note, can you split a mortgage between 3 year and 5 year fixed rates (Interest Cost Average for wont of a better term)?
The government (and not just ours) is throwing money about to stimulate the economy, if this eventually works then is inflation the next nasty genie still waiting to come out of the bottle, it’s a concern for us looking forward, how about others?
