OK, it official I have given in and fixed my rates!

[Peter 14.7]

hi,

btw, i was thinking of fixing my rates too. but now, with the floods in QLD -> Aust GDP forecast to fall, it is unlikely (or unwise) to have a rate rise. the reverse may be true is the economy is in real bad shape.

just my 2 cents worth,
cheers,
Scott

I agree with you but I still feel more comfortable being fixed as I have been seeing a number of these events (USA stuffed, Europe stuffed, Greek crisis, Irish crisis, GM bankrupt, etc..) for the last 2 years as an argument of why rates will stay as is and yet each time, rates has gone up.

I do believe we are at the top of the cycle if logic appliess and the economy has slowed, however in today's world logic is worth very little.

Other articles today say the loss of output in Qld is almost nothing. And world wise, Oil is rising, Gold has dropped . US is recovering. China is trying to slow it self. Irish stuffed. So what......Personally I link the economy to jobs and at the moments jobs are everywhere re: the booming careers ads. Sure retail is not healthy but that is also a fundamental shift to saving over speeding.

IMO you don't fix to "beat the bank". You fix to suit your strategy.

For me I can get some more IP, have set most debt at 7.1%, and in a world that makes no sense being set and forget for 36 months is not too bad.

I can actually afford more increases, cashflow is not an issue but I don't want to waste money. If rates stay I am 0.09% worst off. If they crash down then I have other issues but I and still safe. My rents don't go down.

If our GDP does drop our $ will drop and petrol will go up and then other items, and bingo inflation. The RBA has no other tools other than the "blunt hammer" of rate rises to counter inflation.

Ironically it is rate rises and high rates that have given us IP investors the capital gains of late.

If by some system PPOR house rates were say set at 3%, and consumer rates and IP rates at market, say 8%, then we investors would find in 12 months most renters would buy their own home. Our income would drop and then the costs to own IPs against PPOR would mean we could not complete, we would sell and further flood market with stock bring more drops.

Instead, the Fed and State Gov put more costs onto land, and then give FHO grants to meet the costs, rising prices. Then RBA sees too much gain and the tighten rates and FHO sell out and rent again and no -one builds anymore ( where we are at now) we get the double win of CG and increased RENTS.

regards, Peter 14.7

 

[Intrinsic_Value]

IMO you don't fix to "beat the bank". You fix to suit your strategy.


regards, Peter 14.7

This highlights the difference between the professional and the amature in my opinion.

The professional is coolly assessing their strategy.

Theire 'business' is property investing and as with any good business, thought must be given to strategic planning.

Act dont react. By acting you have greater control over your future.

 

[Spectre]

Interview on Sky tonight had a reporter advising he interviewed a RBA official who didnt see cash rate going up for 6 months. But then around 5.75% Same report advised that there are 5 main rail lines shipping coal to the coast. only 1 is down and the rest are running - at normal speed I believe (I had kids running around so someone can correct me).

It still might be on if you hit the red button on those repeats they do.

Options If people are that concerned but still wish to keep the variable/offset thing running maybe the bankwest or st george promo might suit then review in a year outside of fixing. Or fix for a year with current lender then review at that point in time. A 3 year fixed doesnt sound 'a lot' but at the same time look what the property market did with the last upward cycle.

Say in a year you miss that telstra bill, get a default, cba or LMI brings in a zero tolerance policy, you go to break out/cash up, get a no or a $20k penalty to leave. Knowing you Peter you wouldnt do this but plenty others did.

So probably the point being is dont just worry about the rate, but have your contingency plans in place as well.

Case by case.

 

[Peter 14.7]

This highlights the difference between the professional and the amature in my opinion.

The professional is coolly assessing their strategy.

Theire 'business' is property investing and as with any good business, thought must be given to strategic planning.

Act dont react. By acting you have greater control over your future.

Thank you and may I say you summarize "strategy" very well.

Fixing gives me a control point. I like control. I have two businesses and family trust because they give me control, not power, not wealth, but control. Control over who I work with, when I work, the tax I pay. Fixing is just part of the overall plan.

Peter

 

[investor2009]

Thanks Peter!

Having read your thread last week I too decided to fix my rates.
I called my main bank but they told me fixed rates for three years is now 7.35% after discounts, but since I have an awesome personal banker he said if I got the paperwork to the bank that day he would honor 7.10% which is really good.

I left 20% of all loans variable for ease of refinancing.
Thanks Pete!

 

[turk]

Thanks Peter!

Having read your thread last week I too decided to fix my rates.
I called my main bank but they told me fixed rates for three years is now 7.35% after discounts, but since I have an awesome personal banker he said if I got the paperwork to the bank that day he would honor 7.10% which is really good.

I left 20% of all loans variable for ease of refinancing.
Thanks Pete!

Hi In2009

Could you tell me which bank that is and if there are any fees involved?

Cheers

Pete

 

[Peter 14.7]

Hi In2009

Could you tell me which bank that is and if there are any fees involved?

Cheers

Pete

CBA for me and no fees but the deal was for Dec application only and under the table.

A good broker may be able to find another. I read St George is being aggressive with 1% of standard. Perhaps they have have a good fixed rate.

Peter

 

[sash]

Same deal....CBA Area Manager agreed to refund my exit costs..

CBA for me and no fees but the deal was for Dec application only and under the table.

Peter

 

[artlez]

I just switched to a 1 year fixed with ANZ at 6.99% with no switch fees as it was an internal switch. Considering I was getting 7.3% before that and with the rates more likely to go up than down within a year, I think it was a good move! Even if it stays at its current rates for the year, I will still come out ahead!

 

[Rolf Latham]

IMO you don't fix to "beat the bank". You fix to suit your strategy.

kaching

you can take that to the bank

ta
rolf

 

[investor2009]

CBA for me also.
I doubt you will be able to snag the same deal now but a good personal banker may help.

Hi In2009

Could you tell me which bank that is and if there are any fees involved?

Cheers

Pete

 

[Peter 14.7]

Hi All

On holidays at the moment for a week at the lovely Inverloch RACV Resort, big recommendation to those with children and looking for beach in VIC plus luxury.

So eating a lot and reading papers in depth and from I see, it seems the future of rates is still up.

In fact, some of the stuff of scary as to predictions of inflation driven by wages and high employment growth. As for the floods, it seems it will boom QLD as rebuilding happens. Low for coal and crops more than offset.

Now I wish I was wrong and that rates are going down but I think our gov has lost the plot in managing this economy and we paying the prices. The latest idea is so Gillard can return a surplus in 12/13 they are going to increase the medicare levy to pay for floods. More tax = higher costs = higher inflation. My only fear is three year is too short!

Peter 14.7