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From: Mike .
Fixing rates and rental increases:help please LES and others
From: vivienne
Date: 6/17/00
Time: 9:00:45 PM
My husband and I have four inner city Melbourne properties (3 invest 1 home) and have two questions to ask you:
1. We currently have a debt equity at about 50%. We are about to purchase another investment property value about 450k (debt equity will then go to 60/40%) . We have all our loans fixed at 7.5% and maturing in Jan 2005. We are worried that the loan to purchase the new property at 450k (fixed for 5 years ?) will mature in sept 2005. If interest rates took a major hike upwards we would be very stressed. It appears that fixed loans of greater than 5 years are not IO.P&I make the repayments too big for us. Should we break up the 450k into smaller amounts that mature in say 2yrs, 3years, 5years so that at that point we can fix them for 5yrs so as to stagger our risk? Or what would you suggest?
2. Property prices in Melbourne have doubled over the last 5yrs. Rents have not kept pace with this. When would it be reasonable to expect rents to follow suit?
Thanks for your help
Fixing rates and rental increases:help please LES and others
From: vivienne
Date: 6/17/00
Time: 9:00:45 PM
My husband and I have four inner city Melbourne properties (3 invest 1 home) and have two questions to ask you:
1. We currently have a debt equity at about 50%. We are about to purchase another investment property value about 450k (debt equity will then go to 60/40%) . We have all our loans fixed at 7.5% and maturing in Jan 2005. We are worried that the loan to purchase the new property at 450k (fixed for 5 years ?) will mature in sept 2005. If interest rates took a major hike upwards we would be very stressed. It appears that fixed loans of greater than 5 years are not IO.P&I make the repayments too big for us. Should we break up the 450k into smaller amounts that mature in say 2yrs, 3years, 5years so that at that point we can fix them for 5yrs so as to stagger our risk? Or what would you suggest?
2. Property prices in Melbourne have doubled over the last 5yrs. Rents have not kept pace with this. When would it be reasonable to expect rents to follow suit?
Thanks for your help
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