What happens when Boom goes to Bust..

Couple of things you can do:

1. Revalue you properties now and get it to 80% LVR or less. Any spare cash keep it in a offset.

2. Observer interest rates...some banks are offering 1-3 year fixed rates at 4.38%. Fix before they rise....when rates do go up..it is unlikely the bank will charge you to break as they can loan the money for more

3. Keep lots of money in offsets.....cash is king!

I don't think banks will repossess if you have great conduct and not behind. The neagtive publicity and flow will be disasterous. But ensure you are not behind in payments.

The old hands would have seen what happened in the early nineties and mid 2000s.....the newbies who are full of confidence and have not seen a downturn watch out.

As they say be alert not alarmed....prepare a lifeboat while times are good.;)

Hi Sash just curious did you mean if you have fixed rates with a bank and there was drop and you had negative equity all of a sudden they wouldn't be able to force you pay the capital loss or try to take the property back as long as the repayments were met?
 
DK

It has nothing to do with negative equity...just that for protection fix when the rates are low. I personally feel there is 1-2 more cuts so fixed rates may fall further.

In this scenario...so as rates don't drop more than 1-2 times...your rates will be lower than the banks costs...so you should be able to get out for virtually no penalties bar the admin fee. The bank will unlikely move against you unless you default...the work involved to repossess will be to onerous and suspect at that point in the game they will be more focused on people with arrears and in default. They simply will not have the resources. :D



Hi Sash just curious did you mean if you have fixed rates with a bank and there was drop and you had negative equity all of a sudden they wouldn't be able to force you pay the capital loss or try to take the property back as long as the repayments were met?
 
Yeah I was thinking they wouldn't target anyone who was on time with repayments especially with the negativity you could stir up against them with social media in this day an age. Thanks :)
 
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