NAB cuts one-year fixed home loan rates by 100bp to 5.59%

[Nth Brisbanite]

AAP
November 28, 2008 04:06pm


NAB will cut its one-year fixed home loan rate by one percentage point, to 5.59 per cent.
The one percentage point cut applies also to the two-year fixed rate, reducing to 5.59 per cent, and the one-year introductory rate, reducing to 4.99 per cent.

NAB said the rate cuts would come into force on Monday, December 1.

Even though it looks like a great deal to me I feel that rates could drop even further.

 

[letiha]

Very very very very very tempting

 

[Nth Brisbanite]

Very very very very very tempting

I agree. That introductory rate of 4.99% is amazing

 

[letiha]

yeah but you always get screwed with the intro rates. I'm already with NAB. we are going to wait till january and then fix on 1 of our 3 loans with the NAB for 2 years, the rate now is enought but more of a wait and see, it won't go up before then.

 

[Les]

G'day Letiha,

I'm already with NAB. we are going to wait till january and then fix on 1 of our 3 loans with the NAB for 2 years,

Might be worth waiting till Feb - there is no RBA meeting in January !!!

Who knows what little gems that extra month might provide (I mean, they RAISED rates too high too quickly in the last 12 months - maybe this year they'll drop them too low - and that's when we FIX !!)



Regards,

 

[letiha]

G'day Letiha,

Might be worth waiting till Feb - there is no RBA meeting in January !!!

Who knows what little gems that extra month might provide (I mean, they RAISED rates too high too quickly in the last 12 months - maybe this year they'll drop them too low - and that's when we FIX !!)



Regards,

Aware there is no meeting in January, but the fixed rates have been moving at different times, so i'm thinking even late January to get a fixed rate. Happy to keep the other 2 variable.

 

[nonrecourse]

Banks win 19 times out of 20 when you fix your rate

 

[letiha]

Banks win 19 times out of 20 when you fix your rate

Do you have a source for that statistic....

 

[roosterfan]

Banks can definitely win when you fix..after all they have entire teams devoted to setting rates. However, if it allows you to fix an attractive rate and as a result have certainty in your interest payments, even if you pay a few points too much...you can still win!

 

[Nth Brisbanite]

Do you have a source for that statistic....

I've had a number of different figures given to me on this:

• 8 out of 10. Noel Whittaker published some research on this about a year ago.
• 7.5 out of 10
• and now 9.5 out of 10

I suppose it doesn't matter which of the above is right. It's clear that in the vast majority of cases, those that fix are worse off than those that don't. Recently, I've personally come across quite a few people who fixed for 3 years when the interest rates were about 9%.

Despite all the above, this NAB looks very attractive being more than 2% below the current standard variable.

 

[josko]

I unfortunately would be one of them. My break fee is now over 70k. I am really not interested in working out the exact amount!



Regards JO

 

[nonrecourse]

Do you have a source for that statistic....

I think I saw it on the reserve bank website, Here is another link that quotes the reserve

http://www.quickdirect.com.au/Content/To-fix-or-not.aspx

 

[tobe]

Its like the stock market, when shares go up, every man and his dog wants to buy. When they go down, everyone sells.
Last year, fixed rates became very popular, now everyone says wait, fixed rates will drop further and stays variable.....

 

[letiha]

There is obviously more scope for rates to rise than drop, rates that you or I pay are never going to be 0%. I suppose if you look at historical lows and highs it is getting to a point where you can't loose.

I think the only time you can loose is when you fix and the rate goes down like it has this time. Its funny how a few short months ago people were saying they had missed the boat and had wished they had fixed.

The one thing that concerns me is obviously once the variable rate drops even further the fixed rate is going to be higher. Rates will not stay down forever and at this rate our property will be cash flow positive and we will have no need to break the fixed rate in the next 2 years as if we sell the property we will just transfer it to one of our other loans.

Regardless, we will wait till afetr Christmas to do any fixing.

 

[DCI]

Do you have a source for that statistic....

Statistics are sourced from 19 out of 20 banks.
Hehehe .......

 

[Y33]

If you fix and it is less than you have previously been paying then go for it. Always nice to know what the payments will be per month for the next few years. Another option is to apply for a capped rate. If rates go down further you can still benefit and if they go up then you don't get caught out.

 

[Nth Brisbanite]

Another option is to apply for a capped rate. If rates go down further you can still benefit and if they go up then you don't get caught out.

Do "capped rates" exist in Australia? Never heard of them!!!

 

[quoll]

if you look at historical lows and highs it is getting to a point where you can't loose.

I disagree, if the variable rate is lower than the fixed rate you have lost.

If over a set period of time you have paid more interest by being on a fixed rate you have lost.

I think the real issue is the sleep at night factor, if by fixing your rates it give you a better nights sleep then that is a cost to you but a cost you need to pay so even though you lose in the interest paid game, you are still meeting your higher goals.

Maybe need to define the rules for win / loss!

I think the only time you can loose is when you fix and the rate goes down like it has this time.

Agree in this scenario you loose but it's not the only time it can happen. Although as above rates are not just about winning and loosing. There are other factors at play.

Regardless, we will wait till afetr Christmas to do any fixing.

Just make sure you don't have to sell anything with fixed interest rate loans.

There are bank customers currently taking out personal loans to cover the cost of break fees when selling houses that have fixed rate loans attached to them. The banks work out how much interest they are missing out on and charging the customer. Not nice.

I can spell so don't pick on my phonetic spelling.
loss
loose
lose
loo

regards
Graeme

 

[quoll]

Aware there is no meeting in January, but the fixed rates have been moving at different times, so i'm thinking even late January to get a fixed rate. Happy to keep the other 2 variable.

I have come across at least one news article that mentioned a possible January RBA meeting due to the GFC, could be interesting.

 

[crc_error]

whats the point, the 1, 2 year fixed rates are low, but 5 7 10 and 15 year rates are obscene!