I fixed my rates at 8% cry me a river

[wylie]

How common/plausible is this scenario. Somebody mentioned somewhere else that with some banks it would be possible to re-borrow funds for a loan with someone else, then make a lump sum payment on the fixed portion (which will incur a fee, but relatively minor one), but not paying it all off, say leaving $1000 owing, and then paying the break costs on the $1000. Sounds like a crock to me, but others may know better???

Certainly not a crock as it was probably my post you read. We did exactly this, several years ago, but in further posts the brokers did say that this is not something that can be done now. Maybe the banks "wised up".

We also were lucky that we had other security available to support the new purchase without releasing the security for the loan that we reduced down to about $1000.

 

[travelbug]

This is interesting. Just a few months ago posters were jumping with joy that they had fixed their rates.

When you fix you may not "win" for he whole period. If you fix for 3 years some of the time may be lower than the variable, sometimes higher. As long as it's not higher for the whole time I wouldn't complain.

I fixed a property about 20 years ago. Haven't since.

I'm loving these rate drops. Another $5,000PA saved. Thank you. I might be +ive shortly.

 

[devo76]

I fixed for 5 years at 7.25 %. Have 3.5 years to run. Happy when they went up. Not so happy as they start to drop below. Swings and roundabouts really.I am trying to find that elusive bargain now and would love to lock rates for 10 years at or below 6%. Kinda set and forget for a while.

 

[sparky23]

I have only one fixed loan and it was fixed with st George 3 years ago at 6.79% and will come off next week - brilliant timing for once!

 

[Perchy]

I signed up for 50% fixed & 50% variable, a few months ago during the talks of it going up, then banks started advertising fixed rates and I called to change my loan to 100% variable. Luckily. But even if I stick with fixed, I wouldn't have mind as I budgetted for it.

 

[Sheryn]

The whole point is that no-one, experts included, know exactly what will happen in the future. Taking a fixed rate is so that you have certainty.

I agree no one knows what will happen next, history gives a bit of an idea but take responsibility for your own actions, educate yourself.


Regards
Sheryn

 

[Sheryn]

I am old enough to remember 17%.. Dont think anyone fixed in those days.

Agree - my whole wage went to just make the P&I repayments on our duplex but we sold and made a profit.

Regards
Sheryn

 

[Y33]

Pushka,

I know some that fixed at 15% when borrowing from one of the lawyer/solicitor groups. This was at the same time either the bank or govt created a 13.5% cap on the first 50K borrowed and in 86, 50K was a reasonable sized loan.

I'm surprised more investor don't opt for capping instead of fixing. At least with a cap you get the benefit when rates go down.

 

[LynnH]

Do capped loans exist at the present time??? I've not seen any advertised ...

Cheers
LynnH

 

[wishing_well0]

Gee.....I have some cash on term deposit at 8% I do hope that the bank manager doesn't call me and want to reduce the rate because of the recent rate drops

It really it starting to feel a little like Christmas

 

[Pushka]

Gee.....I have some cash on term deposit at 8% I do hope that the bank manager doesn't call me and want to reduce the rate because of the recent rate drops

It really it starting to feel a little like Christmas

Yes, that is the other side of the coin, isn't it! I feel sorry for self funded retirees; their interest rates will fall for cash deposits, and no doubt most of their share portfolio too. I reckon there will be a lot more pensioners on the list than the Government ever anticipated.

I spoke to our NAB Banking Manager last night as we are looking to refinance with them for our IP; currently with Challenger Finance who 2 years ago were more competitive, but they have lost that edge now. If we change we can offset our NAB accounts, which last night I calculated will save us around $600 a month interest (our business has surplus cash) Anyway, he was saying he doesnt go anywhere near advising people on whether to go fixed or variable these days.

We will lose around $2000 by refinancing early, but will make that up in the first three months! We only ever go variable.

 

[boomtown]

Interest capped loans don't exist anymore afaik?

 

[Peter 14.7]

Interest capped loans don't exist anymore afaik?

Capped Loans truely were an early 90's beast!

As I remember everyone was so shell shocked at 18% rates that in order to get anyone to buy homes Banks offered capped loans fully aware rates would eventually drop but unsure when. I had one capped at 11% and it went down to 9%.

This time we never got to the top of the cycle, which in one way is a shame as clearly many astute investors here did fix (me included). THUS Those who spend now and live on credit have been saved from a much needed reality check and now, unbelievable but true, are being encouraged to spend again!

I unfixed 2 moths back for very reasonable pain (luv CBA) and at this rate will be back in the red within 9 months. My real interest is when to refix again. But for this time 10years as a fixed rate of 5% for 10 years is too good to miss.

I also believe rates will move back up, slowly but surely, once all the D&G has left the papers and the world and almost everyone still has a job in Aussie.

Peter

 

[sue78]

I'm not saying it wouldn't suck and not saying have a winge, just amazing how people expect the government to step in and make the banks release them from their fixed.

Now if that were to happen watch the banks collapse.

That's crazy! ppl should just get over it. It was all good when rates were high and the losers were the variables and now the tables have turned.

 

[Pushka]

I think perhaps we have gotten into the mentality that the Government should fix everything. I reckon it started when they bailed out some companies that almost go under; whilst others just get left to rot. The car manufacturing industry is a classic for this - they produce cars that no-one wants to buy, but the tax payer is the one who has to mop up the problem.

 

[DavidMc]

I think perhaps we have gotten into the mentality that the Government should fix everything. I reckon it started when they bailed out some companies that almost go under; whilst others just get left to rot. The car manufacturing industry is a classic for this - they produce cars that no-one wants to buy, but the tax payer is the one who has to mop up the problem.

Agreed. I imported a FAR superior car, the government taxed the hell out of it (i.e. almost doubled it's price) and it's still a good deal.

 

[Witzl]

Agreed. I imported a FAR superior car, the government taxed the hell out of it (i.e. almost doubled it's price) and it's still a good deal.

Me too.
Local aussie cars are such complete rubbish.

 

[Peter 14.7]

Me too.
Local aussie cars are such complete rubbish.

Clarification needed here as the Toyotas made here in VIC are not rubbish. Camry is almost unbreakable.

Peter

 

[Peter 14.7]

On topic:

I wish these persons who complain about rates being 8% on ACA were asked this question!

So 8% is too high
yes it is
So you must not have any Credit Card debt at 20% then, as 8% is too high, ok?
Well, err I have my $10k card maxed out
So how come you are complaining, even if you rates were 6% you would save 2% but still choose to be paying a nett 18 % on other debt
Err yes, I think
So it is not the banks that caused you high debt but your spending?
I have to go now....

Peter

 

[Novar]

What gets me is if I had fixed at 6% for 5 years and then paid it out after 1 year , do I get a refund from the bank for charges?

NO!!

Banks have it both ways!!