Post settlement Fixed Rate 7.29%

[ipinvestor]

Good news....Our offer had been accepted yesterday for a 4X2 property in Thornlie for $348K and Bad news followed it..........today RBA raised 0.25 points. I received an email from mortgage broker that I shaould fix for 3 years. If I do not fix, the interest rate is 6.76% (variable) but it can be raised in few days.
Here are my questions, please advice.
(1) Loan amount $313,000. The cost for fixing the rate is .15% of your total loan, therefore the cost is $469.8 (.15% of $313,200). If I do not do it, what could happen in 3 years?
(2) I have 2 loans with RAMS at 6.76% variable($700,000). Should I leave it as it or fix for interest rate of 7.39%
(3) Two more properties loan with ANZ at 6.71% ($846,000). Should I leave it as it or fix for interest rate of 7.56%
Just confused and need some support/advice from you all.
Thanks.

 

[Rolf Latham]

Hi

your tag line contains the answer

God, grant me the SERENITY to accept the things I cannot change, the COURAGE to change the things I can, and the WISDOM to know the difference.

Part of that wisdom you can create personally and quickly. At waht point of rates does life for you become difficult ? 8 % 10 % ?

Knowing that and a couple of other things you can probably get a better picture of where to go.


I doubt that any mortal can give you any useful advice on the info we have so far

ta
rolf

 

[softmonkey]

You might as well ask a fortune-teller! That said, a lot of people feel happier having some of their debt fixed. You might think about which are the keeper properties you'd want to hang onto at all costs - those would be the ones to fix, if any.

 

[Perth Investor]

Good news....Our offer had been accepted yesterday for a 4X2 property in Thornlie for $348K and Bad news followed it..........today RBA raised 0.25 points. I received an email from mortgage broker that I shaould fix for 3 years. If I do not fix, the interest rate is 6.76% (variable) but it can be raised in few days.

If your broker advised you to fix, then I would fix, then sue him in a couple of years when you start losing money on it.

He has no place "advising" you on what to do with your rates, if you got it in writing I'd keep that in a safe place...

P.s. I tell clients all the time what my opinion is on whether they should fix or not, but never in writing...

 

[Bradsdad]

Interesting your broker has advised you to fix as this isn't his domain. He/she is leaving themselves open to all sorts of problems in the future.
Educating you on the pros and cons of fixed rates given your personal circumstances is one thing but saying you should fix may send shivers through a few brokers on here.
Nobody has a crystal ball and can tell you how far rates will increase (if at all) in the future. You need to weigh up if the "security" of having loan/s locked in is more important than the performance of the loan at current rates and then make a guess at where rates will head to. Most often customers don't fix just on cost but instead on feeling secure.
In regards to your ANZ debt, their fixed rates aren't that flash at present compared to other majors (that's all ANZ cares about are the other majors) so your broker should be comparing ANZ's rate against the other majors and then seeking a pricing discount on the fixed rate you are looking at. ANZ have been known to come to the party in regards to rate discounts to retain business even on their fixed rates.

Regards
Steve

 

[ipinvestor]

Thanks a lot. I have decided to fix at 7.29%. Most of my debt is variable but only this one $313K will be fixed. Let's see what happens in 2-3 years.
Thanks again.