Why should you get a refund - you fixed for 5 years , not 1.
Thats a lot of interest the bank doesnt get that they thought they were going to when they signed up the loan.
How do they win by you paying it out early
I fixed my rates at 8% cry me a river
- Thread starter letiha
- Start date
Why should you get a refund - you fixed for 5 years , not 1.
Thats a lot of interest the bank doesnt get that they thought they were going to when they signed up the loan.
How do they win by you paying it out early
Well, maybe some of these people were young people, first time house buyers, and they trusted their Bank Manager or someone else important in their life who was giving them what, at the time, appeared to be good financial advice. The RBA was spouting all the time that they had to curb spending (my how things change!) and they were doing this by raising the interest rates. Petrol was rising by the day, and there was not a whiff of the recession word.
I can fully understand why some people, especially the novices, feel very disappointed.
Dont you see some contradictions in your post?
Yes I agree Pushka,
I for one signed a 5 year fixed at the start of this year at 8.5%.
That is the risk one takes, however it can at times be a little hard to swallow that perhaps, just perhaps... theres was a chance that the Rudd government/RBA's war on inflation was a little excessive given unfolding global conditions. But happy times 2011 at 8.5%.
There was a nice article in the Australian business section a while ago (and I think it came from the Wall Street Journal or the Times). It was talking about 2 different illnesses that have affected the market. Before October (Lehmann collapse and all the mess that followed) the author was comparing the credit crunch with cancer that need to be treated with chemotherapy (starving it of easy money, reigning in lending and therefore increasing interest rates). When Lehmann collapsed this was more like a heart attack and suddenly lots of free-flowing cash was required to keep the "patient" alive. So rapid drop in interest rates and bail-out packages. The last sentence was something along the lines that there was no sense in giving a cancer patient, who just had a heart attack, chemotherapy.
I liked the analogy as it explained the conundrum that the market regulators are facing and why there has been such a wild ride with interest rates.
Thought I share this with you.
Cheers
kaf
http://compareshares.com.au/show_news.php?id=S-535442
43,000 people are on fixed loans; The costs of exiting an average fixed rate mortgage jumped to $18,000 because break fees for the loan rise as interest rates fall. Many fixed in March when rates were at their peak!
Hey imonmyway, your better half is always smarter!
43,000 people are on fixed loans; The costs of exiting an average fixed rate mortgage jumped to $18,000 because break fees for the loan rise as interest rates fall. Many fixed in March when rates were at their peak!
Hey imonmyway, your better half is always smarter!
Hi, hindsight is always 20-20. I'm grateful that in a weird way, the intuitive little voice always worked for me. Thanks to the Almighty that looks after fools and idiots.
In May 2008, my broker almost begged me to fix at least part of my loan. I insisted variable & I'll take responsibility for it.
If we keep things simple, the indicators for rate drops were all there. The credit problem in USA was already 6 months old and rates there had started dropping quite significantly. Could Australia keep on INCREASING rates when the rest of the world were dropping theirs?
I took a stand contrary to most then & I moved money sitting in the offset account to FD when the banks offered 8.5% The home loan on that amount is now 7.04 not counting the latest 1% cut. I have another 6 months on the FD With tax incentives, it works out to be around 2% in my favour.
Looking forward, remind ourselves to be humble & think 'what's the simplest approach?'
To me, simple is buy in a buyer's market, sell in a seller's market.
In Adelaide, it is neither a buyer nor a seller's market though the former is fast approaching. So I don't buy property in Adelaide. Yet.
Other places may be different. I see Horsham. Mildura. But I don't want the attendant problems of distance. Can't cope.
So what else is a buyer's market? One staring me in the face. Stocks. 3.9x earnings. Strong track record of dividends.
Time to take another stand.
KY
In May 2008, my broker almost begged me to fix at least part of my loan. I insisted variable & I'll take responsibility for it.
If we keep things simple, the indicators for rate drops were all there. The credit problem in USA was already 6 months old and rates there had started dropping quite significantly. Could Australia keep on INCREASING rates when the rest of the world were dropping theirs?
I took a stand contrary to most then & I moved money sitting in the offset account to FD when the banks offered 8.5% The home loan on that amount is now 7.04 not counting the latest 1% cut. I have another 6 months on the FD With tax incentives, it works out to be around 2% in my favour.
Looking forward, remind ourselves to be humble & think 'what's the simplest approach?'
To me, simple is buy in a buyer's market, sell in a seller's market.
In Adelaide, it is neither a buyer nor a seller's market though the former is fast approaching. So I don't buy property in Adelaide. Yet.
Other places may be different. I see Horsham. Mildura. But I don't want the attendant problems of distance. Can't cope.
So what else is a buyer's market? One staring me in the face. Stocks. 3.9x earnings. Strong track record of dividends.
Time to take another stand.
KY
i too saw signs not to fix - but mine were a little different.
i looked at the mass media and the hype about the consumer pain people were going thru, and the "forced" sales, combined with falling house prices and knew, that with the general setiment, interest rates wouldn't keep rising.
mass media is a great indicator of sentiment - but mass media is not fact. sentiment is what drives the economy.
i looked at the mass media and the hype about the consumer pain people were going thru, and the "forced" sales, combined with falling house prices and knew, that with the general setiment, interest rates wouldn't keep rising.
mass media is a great indicator of sentiment - but mass media is not fact. sentiment is what drives the economy.
True Lizzie,
Certainly, although excited, I'm also in NO hurry to fix rates. It's been hard over the last 12 months, but clear skies are here now
I'll keep my eye on the radar, and be ready to fix once more when the stars align.
Good thread, BTW - thank you to the instigator,
Regards,
And, while the PM and Treasurer keep on emulating Hanrahan ("We'll all be rooned"), that ship will likely take a LONG time to turn around.
Certainly, although excited, I'm also in NO hurry to fix rates. It's been hard over the last 12 months, but clear skies are here now
I'll keep my eye on the radar, and be ready to fix once more when the stars align.
Good thread, BTW - thank you to the instigator,
Regards,
I like your attitude, look at the big picture, avoid analysis paralysis and take the road that is less followed.
