fixing interest rate

[stirling]

It seems to be the optimum time to fix rates is after the RBA has raised its rate but before the Banks have. RBA - wed, Westpac -monday.

I am with the big banks. Someone told me that smaller lenders sometimes only fix on a Friday or adjust fixed rates everyday to match the cost of their money.

It would be best to fix loans secured by the properties that have maximum borrowings and you are least likely to sell in a firesale. Also there is little loss of flexibility if there is a facility (as at the Westpac) where a Equity Access Loan can be added to a fixed loan when refinancing to increase borrowings in the future.

This strategy seemed to work for last week. Any comments?

Stirling

 

[Rolf Latham]

Hi Stirling

That makes great sense, and I would add that to try and fixe with the lender that has the most generous serviceability, so that future equity can be extracted

ta
rolf

 

[Rolf Schaefer]

fixing with a cheap interest rate using a wholesale funder can bit you back when wanting to access mire equity due to the usually more restrictive serviceability models in place.

Go for lenders with an excellent serviceability model that suits investors such as Westpac or St. George plus some others.

 

[scott]

So if you ask to fix rates, is it the rate advertised on that day or the rate that comes into effect 6 weeks later when the paper work is done?
BTW any idea the day when ANZ responds to the RBA?
Thanks
Scott

 

[Rolf Latham]

Hiya Scott

Most banks will move tha variable within 10 days of the RBA.

Fixed rates are not that predictable, and will move with the market BUT also with that lenders position in that market.

With many lenders you can pay a rate lock to ecure the rate at date of appln or approval.

When flicking over from a variable that shouldnt take more than a few days

ta

rolf

 

[scott]

Thanks Rolf,
Something to think about.
Scott

 

[scott]

Rang ANZ yesterday.

They passed on th .25% to their 1 year fixed interest on Monday.

Assuming this happens next time the RBA announces on the Tue and bank amends rate on the following Mon this gives you 3 working days to fix before the increase.

If you do it over the phone it takes 2-3 weeks, but if you do it in the branch it can take 48 hours.

Has anyone successfully beat the bank at this?

Scott

 

[abcdiamond]

St George havent moved their 5 year fixed rate, but I think they have increased the 1 year fixed.

 

[Simon]

If you have an ANZ application in and your switched on broker warns you of the rate rise then rate locking takes 10 minutes in a branch!


cheers,

 

[stirling]

Westpac can fix your variable to current fixed rate straight away by phone or fax.

Go Westpac

Stirling