If bank offered you 4.99% fixed for 3 years today, would you do it?

[aw1]

Westpac did indeed withdraw this offer.

I'm a bit disappointed.. as I am not due to refinance a fixed rate until October this year. I have a feeling we will well and truly be at or near the bottom of the cycle by this time and fixed rates will start to go up. I will be fixing regardless of what the rate is - I like certainty when it comes to investment properties - I just had hoped the timing would have been a little better!

Will be interesting to see what the future holds. Anything mid to late next year in the 5's and 6's fixed for 3 years I will still be happy with as I am cash flow neutral fixed in the 7's at the moment.

 

[Rixter]

I will be fixing regardless of what the rate is - I like certainty when it comes to investment properties

That's exactly what fixing rates is all about.

 

[letiha]

That's exactly what fixing rates is all about.

fixing is knowing that till 19 January 2012 my property is going to be cash flow positive before tax by at least $50 a week. Considerably more after tax deductions.

 

[eternit]

fixing is knowing that till 19 January 2012 my property is going to be cash flow positive before tax by at least $50 a week. Considerably more after tax deductions.

No. Fixing rates is about managing risk, anything more then that is a bonus....

 

[Rixter]

No. Fixing rates is about managing risk, anything more then that is a bonus....

Correct..its risk management tool. One of many tools at the disposal of a savvy property investor.

 

[murtagh]

No. Fixing rates is about managing risk, anything more then that is a bonus....

I'm missing the difference between what you said and what letiha said?

ie: CF+ till 2012 sounds like prudent risk management to me?

 

[eternit]

I'm missing the difference between what you said and what letiha said?

ie: CF+ till 2012 sounds like prudent risk management to me?

The way letiha said it, it sounded like she was talking about how good it is to have the CF+ till 2012....

Fixing rates is not about having CF+ properties, its about managing risk.

Say for e.g. in the next 3 years the variable could drop down to 4% and stay there, does that mean its not worth taking the fixed rate? For some people it is worth it, depending on their situation and how they manage risk.

For e.g. a lot of people would fix their interest rate even if they end up paying more by fixing then staying on variable. The reason being they are managing their risk by having that certainty of how much they will pay in the next coming years.

Good way of looking at it is by thinking of it like a put option. When you buy shares, you can put a put option on it so if the price falls you wont have big losses, its risk management......

Nothing to do with CF+....

Hope that makes sense.

 

[murtagh]

The way letiha said it, it sounded like she was talking about how good it is to have the CF+ till 2012....

ah, gotchya! You thought she meant just the rate was good - I took it to mean that the rate/certainty was good.