speculative interest rate in 1 yr time

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From: G V


hi everyone,

I would like to know what could be the interest rate in one year time. The reason i am asking this is because i planning to take 1 year fixed rate (premium rate 1% less than the normal rate). This will save me around 5k. At the end of one year i have got a choice of either fixing it again for 3yrs (of course at the rate prevailing then and at no cost) or go into variable rate. any input would be appreciated.

thanks

GV

 

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Reply: 1
From: Fernando Loprete


I am currently shopping around for deal to fix my loans and I am considering fixing for 5 years at 7.05% with Bank West. My theory is that if I fix them now, I will be secure for the next five years. Sure I might miss out on another possible rate cut but in the long run I think I will come out on top.

 

[Rolf Latham]

Reply: 2
From: Rolf Latham


Hi GV

Rates are always a fickle thing.

You could be looking at fixed rates as a risk managemetn tool, rather than a price issue. Rate risks are what send most IP investors to the wall when unexpected but short spikes "appear".

One year fixed rates are a marketing tool to get you thorugh the door. Much better to look what the long term deal is ! Some lenders dont mind revaluing and giving you the equity in cash, some will capitalise LMI etc etc. Theres more than rate to a deal.

Ta

Rolf

 

[Ian (WA)]

Reply: 1.1
From: Ian Parham


'Evening All
GV and Fernando...there was an article posted recently from Paul Zagoridis (20/6) titled 'Fixing Rates'..about two pages back!
Good article and discussion. Perhaps have a read to see if there is anything useful to consider.
Cheers Ian

 

[Rolf Latham]

Reply: 1.2
From: Rolf Latham


Hi Fernando

Get yourself an independent broker to do your shopping. The Bankwest rate is ok, but if yiu are rate concious there are many at 6.79 and some less. On a big lend over 5 years there may be some better deals, and different packages that may suit you better. The Bankwest Gold Home Loan is pretty good if you qualify on income and borrowings


Rolf