Lowest Rate or Lowest Fixed Rate?

[noodles]

I've been perusing the rates at Canstar and Ratecity. I'm looking for a lender that will give me the option to fix up to 50% of my loan for 5 years when interest is at their lowest.

All else being equal, if I was given a choice of two lenders - say lender A with the cheapest variable loan, but with a higher fixed rate; or lender B, with a higher variable, but the lowest fixed rate - which would you go for and why?

 

[Perth Investor]

Rates change so quickly that any bank you choose today would be a different bank if you chose in a months time.

Having said that, I think the variable rates are pretty competitively priced and there isn't too much difference between banks on it. But the fixed rates are all over the place between banks, and so I would more likely choose a bank with better fixed rates.

 

[Rolf Latham]

Hiya Noodles

I notice you dont have a reply..............thats possibly because how long is that piece of string.

There isnt really a logical answer to that question for any number of reasons, but the primary ones that Imay throw into the ring is

Lenders that have low fixed rates, dont always have that rate for you to settle on..................

Weigh up your overall structure, its not all just numbers

ta

rolf

 

[danwatto]

I've been perusing the rates at Canstar and Ratecity. I'm looking for a lender that will give me the option to fix up to 50% of my loan for 5 years when interest is at their lowest.

All else being equal, if I was given a choice of two lenders - say lender A with the cheapest variable loan, but with a higher fixed rate; or lender B, with a higher variable, but the lowest fixed rate - which would you go for and why?

I would change one thing. I would fix at least 80%, leaving 20% variable.

Why? Because the disadvantages with fixed are mainly related to being stuck with that lender. So if you're stuck with them, you may as well fix most of the loan for one property, and have another future property as flexible/variable.

Keeping 20% variable lets you have an offset and an area to put extra cash.

With the above changes, definitely the lender with the lowest fixed rate!

 

[noodles]

Looks like lender with the lowest fix is the way to go. Thanks for your opinion.

Rolf says:
thats possibly because how long is that piece of string.

 

[auror]

^^ It's an expression. "How long is a piece of string" is a question with no "right" answer, just as your question doesn't necessarily have a "right" answer...

Fixed rates are trending up right now (ING, CBA, Bankwest, NAB), so by the time you get your loan organised it might be a different story!