Interest Rates Down?
- Thread starter fgayton
- Start date
Sometimes it's a matter of not looking what you have "lost" but appreciating peace-of-mind over what you "could have" lost.
OK, locking in at 7.7% could feel like you're losing. But interest rates could have gone the other way, and you'd be laughing.
For example, locking in fixed rates *now* at 6-6.5% means you might be paying a couple of thousand per year extra in interest (which is deductible on an IP, too), but that could be considered a fairly inexpensive insurance premium if rates were to move up through 8-10%.
At the end of the day, an investors tries to invest, not to speculate. But fixing interest rates is a form of a speculation, isn't it?
Ah thanks, Ben, I've misplaced my copy too.
Ah yes, the book is advertised in http://www.somersoft.com.au/Book3.htm
And there's an overview in http://www.somersoft.com.au/Book3_Intro.htm
And could be ordered at http://www.dymocks.com.au/ContentDynamic/Full_Details.asp?ISBN=0958567204
But I'll have to check at my local bookstore to see what story 75 says.
As I am paying for it at the counter, of course.
Ah yes, the book is advertised in http://www.somersoft.com.au/Book3.htm
And there's an overview in http://www.somersoft.com.au/Book3_Intro.htm
And could be ordered at http://www.dymocks.com.au/ContentDynamic/Full_Details.asp?ISBN=0958567204
But I'll have to check at my local bookstore to see what story 75 says.
As I am paying for it at the counter, of course.
Dear Les - Good recap and definitely could be worth Geoff considering.
Dear Ben and Geoff,
Essentially the story is about discussing with your existing bank and weighing up about taking a hit/penalty to get your existing rate changed (After searching for the best competing bank comparison)
However having said that if you guys haven't bought a copy I do suggest that you purchase one.
It is full of great property case-studies and should be compulsory reading. Also it is a great way to give something back to Jan and Ian who are funding this fantastic resource for us.
Cheers,
Sunstone.
Dear Ben and Geoff,
Essentially the story is about discussing with your existing bank and weighing up about taking a hit/penalty to get your existing rate changed (After searching for the best competing bank comparison)
However having said that if you guys haven't bought a copy I do suggest that you purchase one.
It is full of great property case-studies and should be compulsory reading. Also it is a great way to give something back to Jan and Ian who are funding this fantastic resource for us.
Cheers,
Sunstone.
Ok you got me........
after a search
#75 Paying the penalty
GeoffW took out a 7.7% fixed rate 3 years ago, this seemed like a good idea as rates hadnt been below 10% for 6 years.
GeoffW was horrified to watch rates fall to 7% then 6% then 5%.
He then went a spoke to his bank after working out exit costs etc (and finding the comparable rate was now 5.5%) and told them how good their services were. He then asked if they would waive the exit costs to keep him as a customer.
After speaking to his manager the banker apologised, they could only offer him 6%
Moral - it never hurts to ask
after a search
#75 Paying the penalty
GeoffW took out a 7.7% fixed rate 3 years ago, this seemed like a good idea as rates hadnt been below 10% for 6 years.
GeoffW was horrified to watch rates fall to 7% then 6% then 5%.
He then went a spoke to his bank after working out exit costs etc (and finding the comparable rate was now 5.5%) and told them how good their services were. He then asked if they would waive the exit costs to keep him as a customer.
After speaking to his manager the banker apologised, they could only offer him 6%
Moral - it never hurts to ask
Browsing through the "rates" section on the "Your Mortgage Magazine" web site, one broker, Club Financial Services has 1 year fixed at 5.69%, 3 year fixed at 5.87 and 5 year fixed at 6.12 and no start-up or ongoing fees. Anyone know much about them?
http://www.yourmortgage.com.au/rates/
The Fester
http://www.yourmortgage.com.au/rates/
The Fester
G'day XbenX,
You got the guts of it with this:-
... but you missed the important bit ... "with NO penalty"
In the story, "Maurice" went prepared with documentation showing that EVEN WITH the $20k Break Cost fee added to the re-financed mortgage, that OTHER lending institutions would give him a deal that saved him 30%+ Of course, he was 3 years into a 5 yr Fixed loan (not quite like Geoffw) - so any gains would be duplicated for the next two years.
Then he played his Ace (after showing the Bank that others were prepared to "bail him out") - he said "What can you do about waiving the penalty to keep me as a client?" Basically, he was ignoring the Bank's RULES, and creating his own (Peter Spann would have been proud...) And the Bank capitulated (almost) by reducing his Fixed rate from 11.5% to 8% - not quite the 7.6% that this Bank was offering everyone else at that time. But still, QUITE a concession !!!!
For you Geoffw, there may not be the gains that Maurice created - but, what might it be worth to try it????? Is $300 (just a guess...) worth an hour at the Bank? Your call
Regards,
You got the guts of it with this:-
... but you missed the important bit ... "with NO penalty"
In the story, "Maurice" went prepared with documentation showing that EVEN WITH the $20k Break Cost fee added to the re-financed mortgage, that OTHER lending institutions would give him a deal that saved him 30%+ Of course, he was 3 years into a 5 yr Fixed loan (not quite like Geoffw) - so any gains would be duplicated for the next two years.
Then he played his Ace (after showing the Bank that others were prepared to "bail him out") - he said "What can you do about waiving the penalty to keep me as a client?" Basically, he was ignoring the Bank's RULES, and creating his own (Peter Spann would have been proud...) And the Bank capitulated (almost) by reducing his Fixed rate from 11.5% to 8% - not quite the 7.6% that this Bank was offering everyone else at that time. But still, QUITE a concession !!!!
For you Geoffw, there may not be the gains that Maurice created - but, what might it be worth to try it????? Is $300 (just a guess...) worth an hour at the Bank? Your call
Regards,
