Most of the big four give at least .15% discount off their fixed rates if you want to pay $400pa for their package fee
Is now the time to fix your interest rate?
- Thread starter ozmale42
- Start date
Most of the big four give at least .15% discount off their fixed rates if you want to pay $400pa for their package fee
Make sure you do the sums as well to ensure that the package is worthwhile (note just talking interest rate not the other benefits that come with the package).
for $400 fee with .15% discount need a loan over $267k to be worthwhile
Thats true...with the Westpac deal I get fee free Visa and AMEX cards and access to a person who I can contact via phone or email for advice, queries etc..When I applied for my most recent loan all done by email communication to the one contact. She will be dropping in to my work later this week for me to sign the loan forms...Better than dealing with some Joe at the branch
Even if the cash rate does drop another .25-.50%, the banks are unlikely to pass the full cut on, making the difference between fixed and variable negligible. So the question I guess becomes, how long do you think rates will stay down before the economy picks up and they revert back to trend?
That said, I find it quite confusing how CBA have just slashed their fixed rates again yet are forecasting the cash rate to be at 3.5% by the end of the year. I would understand if their forecasts were down as with ANZ (2%) and NAB(2.25%), but their not.
Can anyone shed any light on this?
That said, I find it quite confusing how CBA have just slashed their fixed rates again yet are forecasting the cash rate to be at 3.5% by the end of the year. I would understand if their forecasts were down as with ANZ (2%) and NAB(2.25%), but their not.
Can anyone shed any light on this?
Which report did you get the 3.5% from.
From what ive seen CBA Economist had 3% by the end of the year.
Also note that fixed rates usual are inline with bonds markets not the RBA
Which report did you get the 3.5% from.
From what ive seen CBA Economist had 3% by the end of the year.
Also note that fixed rates usual are inline with bonds markets not the RBA
Not a report. Panel discussion on the 'rates reaction' show on sky business channel.
Their fixed rates are set by their interpretation of the bond/money market.
their forecast for variable rates are set by (or at least announced by) their celebrity economist on the telly.
For what its worth the projection is from Comsec. Which I believe is a subsidiary of CBA.
Mono. You are confusing how fixed are funded / priced. It is the money market cost of funds over set period plus the banks profit margin. It is not determined by where the bank thinks rates will be in the future. This is why they come with the break costs so they are not taking a position on rates at all.
On CBA dropping their fixed by 0.1% that is purely a competition driven factor, they are also discounting aggressively ATM on variable loans.
On CBA dropping their fixed by 0.1% that is purely a competition driven factor, they are also discounting aggressively ATM on variable loans.
Thanks Marty and Tobe, I now understand the fixed pricing however it appears to me to be an example of the left hand not working with the right hand.
The projection I was referring to was with respect to the cash rate, which has a direct impact on the variable rates, which when consequently compared to the fixed rates (regardless of how they are priced) suggests to me that we are close to the bottom of the cycle from a fixed rate perspective.
No doubt about your suggestion, however bankers would argue the impact isnt as direct between cash rate and variable rate (more interbank or 30 day rate and variable home loan rate), and that they dont compare the fixed and variable rates. Its only us consumer mugs that do. They price their fixed rate loans in Switzerland, add a margin, cover for currency risk and then retail it on to us. There is no comparision between fixed and variable. Sometimes they are plotted together on historical charts, and some people notice patterns. But its just a pretty pattern.
lol I agree, but from the perspective of a consumer mug
and in relation to the OP, surely now is pretty close to a good time to fix, if fixing is what you want to do?Discount on Fixed rates - WBC
Hi
I would be interested for any thoughts on ozmale42 earlier comments,
"On the premium package Westpac offer 0.2 off fixed and 0.7 off variable...My current variable rate discount with them is 0.9 so I'm hoping they may go further than 0.2 on fixed"
I'm currently on 1.1% discount with Westpac (on variable loans of $2.2m) and I would be interested if anyone has obtained (from Westpac) more that 0.2 discount on their fixed rate.
Thanks in anticipation.
As usual a great forum with terrific comments.
Tony
Hi
I would be interested for any thoughts on ozmale42 earlier comments,
"On the premium package Westpac offer 0.2 off fixed and 0.7 off variable...My current variable rate discount with them is 0.9 so I'm hoping they may go further than 0.2 on fixed"
I'm currently on 1.1% discount with Westpac (on variable loans of $2.2m) and I would be interested if anyone has obtained (from Westpac) more that 0.2 discount on their fixed rate.
Thanks in anticipation.
As usual a great forum with terrific comments.
Tony
I'm sure they would offer more than 0.2% if it was to match another major bank, but to go more then 0.2% for no reason... why would they?
If they don't offer more then 0.2% and OFI is better and you want fixed then move
Definately can split, usually will have paperwork but shouldn't be a whole new application
tick and flick with some lenders
low impact app, CBA
and spanish inquisition with others - ANZ - full credit critical hoops
ta
rolf
yes you can
lol I agree, but from the perspective of a consumer mug
the best time for a consumer to fix is the time that best suits their personal circumstances and risk profile. So if they cant sleep, fix, if they are expecting a new addition to the family, if they foresee changes to their future circumstances, if they are on a fixed income etc.
Someone that thinks they have a shot at 'beating' the banks spread to variable over the fixed rate term (and about 20% of fixers do) might think this is a good time.
personally, I made the call late last year 3 and 5 year rates wouldnt dip beolw 5%, and I have fixed some of my mortgages. However Im not sure a 3 yr fixed rate taken out now will beat the spread over the coming 3 years. Variable rates could fall further, or stay at the same levels for 2 of the next 3 years, in which case they would average to be better than the fixed rate.
