I fixed my rates at 8% cry me a river

[letiha]

Is it just me or does anyone else get really annoyed at comments not only on this site but other sites and the general media about people who are now moaning and crying not fair because they locked their rates in ealrier this year.

And they thought they were so clever when they did and rates were going up past 9%. Well guess what i had to watch my rates go from 7.35 % in May 2007 only 1 year later. I had to pay and i didn't demand that the government force the banks to let me lock in a rate that was lower than what i was paying.

I hate it when people won't take responsibility for their own actions. Hello FIXED means FIXED.

 

[Stella]

I agreee - I fixed last Oct at 7.79 for 3 yrs - I was happy with that at the time & it has saved me some money since then. We still have pretty much 2 years to go so now it will cost me some money - swings & roundabouts really.

It was my choice to fix & take control/responsibility of my debt and while I have no idea what compelled me to fix for 3 yrs (have only EVER fixed for 2 yrs in the past) it was a decision I made at that time, based on my circumstances at that time.

Hindsight is a wonderful thing and although I may at times regret fixing, I am also not prepared to pay the huge amount to reneg on that arrangement so I live with it.

At least it is only the IP that is fixed not the PPOR too.

Cheers
Stella

 

[Les]

G'day Letiha,

people who are now moaning and crying not fair because they locked their rates in ealrier this year.

Yeah - a bit like those who buy "something" today, then, when it's on Special next month, they want a refund?????

Funny thing is, if the price went UP the next month, they wouldn't be offering to PAY MORE would they???

I'm with you - we make our beds ...........

Regards

 

[thedon]

Hi

I fixed for 5 years at 8% last year. Can't get out as you say without paying a huge break fee, but at the time I needed to know what my payments were on the IP as the amount of debt could have sent me to the wall. rates did go to over 10% for commercial loans and haven't dropped much yet compared to home loans. I think nothing wrong with fixed rates as it helps you plan much better. Also tax deductible! No one has a crystal ball otherwise we would be share trading

Don

 

[Kristine..]

Hey, Never mind about that ....

A friend of mine who fancies herself as an astute Property Investor went to the Auction of land in a Melbourne suburb in 1989.

She was the successful bidder for two blocks. On the way to the marquee to sign the contracts, a local builder approached her, and said '$5,000 for each block, love, if you let me sign the Contracts'

Being a shrewd woman, she immediately shot back '$10,000 a block!'

'Nah', he said '$10,000 is too much, $5,000 per block or you can have them'.

She then organised her own finance and FIXED THE RATE AT 17.5% FOR FIVE YEARS!

Yeah, right!

But did she complain, did she blame anyone else?

Never. She took it on the chin like the strong woman she is, eventually selling the blocks for a small profit each - but less than the $5,000 she would have made had she accepted the builder's offer.

She currently has a net worth of about $2,000,000. It's not in her nature to complain or to blame other people. She just gets on with it and leaves the moaners in her wake.

The Moral Of The Story, of course, is to look before you leap.

Variable Rates may go up, but as we have seen recently and many times before, they do actually come down again.

I bought my first business in October, 1989 with an ANZ Better Business Loan - at 24.25%. When I sold that business five years later, the Cash Rate was down to 5.50% although I was still paying 13.75%.

Still, the 3% drop in the Variable since March, 2008 is a great relief and I will say my 'Thank You' prayers before I go to sleep tonight.

Hip Hooray!
Kristine

 

[Nth Brisbanite]

She then organised her own finance and FIXED THE RATE AT 17.5% FOR FIVE YEARS!

Yeah, right!

But did she complain, did she blame anyone else?

Never. She took it on the chin like the strong woman she is, eventually selling the blocks for a small profit each - but less than the $5,000 she would have made had she accepted the builder's offer.

She currently has a net worth of about $2,000,000. It's not in her nature to complain or to blame other people. She just gets on with it and leaves the moaners in her wake.

The Moral Of The Story, of course, is to look before you leap.

Kristine

Great post, Kristine. I agree, what's done is done!! No use complaining or blaming someone else.

Wow 17.5% for 5 years!! I whinged like crazy when my Macquarie loans got up to 10.32%

 

[Pushka]

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.

Great post, Kristine. I agree, what's done is done!! No use complaining or blaming someone else.

Wow 17.5% for 5 years!! I whinged like crazy when my Macquarie loans got up to 10.32%

Dont you see some contradictions in your post?

 

[MissMuffitt]

G'day Letiha,


Yeah - a bit like those who buy "something" today, then, when it's on Special next month, they want a refund?????

Funny thing is, if the price went UP the next month, they wouldn't be offering to PAY MORE would they???

I'm with you - we make our beds ...........

Regards

Off Topic sorry... but...

I had a customer buy a trampoline at work the other day, he was going to pick it up in the afternoon.
He had a look at the next catalogue and realised that it was going to be on special and save him $49 dollars! So instead of picking it up that afternoon, be came back and got a refund...thinking that he would buy it when it was on special.
Guess what... they are all sold out now and he will probably miss out on it at the special price.
Sorry, just had to share the story.

Back on topic!

 

[Pushka]

Hey Miss Muffit, I have had sales assistants tell me the item will be cheaper if I wait a day, and they have held me one back! I guess a trampoline is a little bigger though.

 

[IndexFund]

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.

Great post and spot on.

I am one of those people who feels bitter about the interest rates.

I just bought my first house to live in 6 months ago, at the time all the "experts" were telling me that interest rates were going to come down very soon. Suddenly as i was formalising my papers, interest rates started going right up again... I felt that if I waited another month then they would go up even further, and they did, past 9%.

I fixed my rates at 8.49% for 3 years in June and now I feel betrayed I guess by all these "real estate gurus"... the fact is NOBODY knows the market. Its all a gamble in the end and I am not a gambling person, I have never placed a bet on a horse or played pokies. I like to use what I can earn.

the bank told me it will cost me over 26 K to break the fixed rate... screw that. Ill wait until 2.5 years come up, and by then I hope that the rates will be hovering arounf 4-5%. Then I can do whatever I please...

In the mean time I need to buy my first IP...

 

[granev]

Must admit I was feeling pretty clever about fixing 2 years ago , but its not looking so clever now.

Still , I know exactly what I have to pay , regardless of rises and falls , if rates go up , Im in a good position , if rates go low , generally it encourages more people to think about buying , which should help houses hold there value better than if rates were high , so Im still in a good position.

Its a learning curve , and who is to say that in the term of the loan rates wont go up again ?

 

[IndexFund]

Must admit I was feeling pretty clever about fixing 2 years ago , but its not looking so clever now.

Still , I know exactly what I have to pay , regardless of rises and falls , if rates go up , Im in a good position , if rates go low , generally it encourages more people to think about buying , which should help houses hold there value better than if rates were high , so Im still in a good position.

Its a learning curve , and who is to say that in the term of the loan rates wont go up again ?

I think from what we have seen, any damn fool can work for RBA.
There is no congruency to their decision making.

 

[Peter 14.7]

Analysis that and analysis that but in the end, there is always, a throw of the dice.

Personally, my IP fixed at 6.19% for 5 years came out in August and went to 8.5%. The wife went PLEASE EXPLAIN. I told her, thats investing.

Now in 10 days that IP will be at 6.04%. Who would have guessed?

Peter

BTW does wife owe me an apology:

 

[lizzie]

Great post, Kristine. I agree, what's done is done!! No use complaining or blaming someone else.

Wow 17.5% for 5 years!! I whinged like crazy when my Macquarie loans got up to 10.32%

ummm - if you look you'll notice that the "whinge like crazy" comment is not kristine's ...

the squealing is just a repeat of the early 90's. i clearly remember all those that fixed at 15% (when rates were around 18-20%)having a major media bash when they dropped back to around 10%.

can't recall the outcome tho - i think the government just said tough bickies.

 

[DavidMc]

I'm 1.5 years into a 3 year fixed loan of 7.30%. This is 50% of my lending.

My standard variable is now 5.84%.

Could be much worse!

 

[lizzie]

the "experts" were telling me that interest rates were going to come down very soon. Suddenly as i was formalising my papers, interest rates started going right up again... now I feel betrayed

why do you feel betrayed? they said the rates would come down soon, and they did, but you chose to fix anyhow. do you feel betrayed by your gut instinct?

i'm happy that i picked it right - even tho i don't come close to calling myself a guru. i left everything variable and on one of my wrap properties that came off fixed i advised the purchaser to refix, but only for one year. that property comes off around march, so will work well for her too.

 

[IndexFund]

why do you feel betrayed? they said the rates would come down soon, and they did, but you chose to fix anyhow. do you feel betrayed by your gut instinct?

i'm happy that i picked it right - even tho i don't come close to calling myself a guru. i left everything variable and on one of my wrap properties that came off fixed i advised the purchaser to refix, but only for one year. that property comes off around march, so will work well for her too.

Im still fairly young and inexperienced in RE. I have never cared to research into what property is right up until the start of this year really.

I guess learning a ^&^%load and trying to understand it all within a short period of time put a lot of stress on me hence why the bitter feeling. But as my friend said, "It gets easier when you buy the second house"

 

[willfong]

I fixed at around 8% but don't complain about it as I treat it like insurance. You pay the premium but hope you never have to use it because if you do that means something bad happened. Low interest rate is good, cheap credit keeps the property price up. I wouldn't wish for rising interest rate just because I have fixed mine, if people around me are struggling to pay their interests chances are the price will collapse.

 

[ianvestor]

My biggest loan is fixed at 8.32% until Feb 2011.

But I am glad I never fixed my Macquarie loan which peaked at 10.66% and is now back down to 9 something, maybe 8-ish soon, following RBA's announcement.

 

[marg4000]

We fixed back in the 1990s for what seemed like a very good rate - until the rates started dropping quickly. We paid the break fees and got out of it. Didn't whinge about it.

Daughter came off 6% fixed rate in July, they were offered a further fixed rate but we persuaded them to go variable.

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.

Interestingly, I was looking at an API magazine from earlier this year, May or June or thereabouts. Predictions were given by about 8 "experts" about where interest rates would be by the end of 2008. NOT ONE predicted anything remotely resembling what has happened - 7 out of the 8 said they would be higher, only one said they would be lower but not by much.

There was talk in the Brisbane newspaper this morning that one person is going to take the CBA to court about his break fees - around $50K. Outcome will be closely watched.
Marg