Interest rates are down more than i remembered

[Snoopy]

Was just curious and had a look at an old bank statement on-line and was a bit surprised how high rates were before the GFC hit. Its not going back there any time soon but shows how far it has fallen in 6 years

Statement begins: 1 Jan 2008
Statement ends: 30 June 2009
Required Payments Interest Only
Interest rate 8.590% per annum

 

[perthguy]

Yeah, yipes!

First loan Sep-11 - 9.04%
Second loan - Sep-11 - 8.64%
Third loan - Sep-11 - 8.14%
Fourth loan - Sep-11 - 8.84%

Gees I had a lot of loans.

Currently:
Loan 1: 4.13%
Loan 2: 4.15%

happy days!

 

[hugh72]

Shows how quickly things can change for good or bad depending on perspective

 

[Paul@PFI]

That's what APRA are concerned about. Too many borrowers are going hard in at 4.5% with equity based on second loans against other property equity and would struggle to repay such high gearing at 7.0%. Now imagine if rates were 9%. How many borrowers could afford to cope with the triple whammy.
- Falling asset prices which mean losses on loans;
- Falling rents if property prices slide and sellers get panicked to get out;
- Increased repayments due to higher rates. (9% is double current rates)

Whether any or all of this occurs seems unlikely at this point BUT if it did the banks may struggle to realise their loan books. Don't even mention the R word.

 

[Marty McDonald]

- Falling rents if property prices slide and sellers get panicked to get out;
.

Agree with everything but this.. rents would rise in such a scenario as sellers became renters.