After the unexpected rise of fixed rates, whats your guess?
Who believes fixed rates will be cut?
- Thread starter want2bewealthy
- Start date
I've just fixed the majority of mine at the low rates (ie. before last weeks rise). If I miss out on the bottom by .20% here or there I'm not going to lose any sleep, but I think it's much more likely they'll be above last weeks lows from now. Remember, not only would they need to drop again just to get to where they were, but also fall further. I just don't see it happening.
Why do they have to fall further Steve? If someone is hanging out on the variable, which is 1% lower than the fixed, aren't they saving money?
d i t t o.
Let's not forget the endgame is not picking the bottom for fixed rates - a lot of backslapping about getting locked in just before they went up. For me, that's not the point.
Ultimately, it should be about whether you're better off financially as a result of fixing. That's taking a financial perspective and ignoring SANF, certainty argument etc.
Ultimately, it should be about whether you're better off financially as a result of fixing. That's taking a financial perspective and ignoring SANF, certainty argument etc.
Results so far are looking quite confused.
Also, well put HG, That is of course the end goal but poll is just for curiosity's sake.
It will be interesting to see how variable rates go into 2010, at the end of the day it is a gamble, and I'm not one to gamble but in this instance I'm playing.
Also, well put HG, That is of course the end goal but poll is just for curiosity's sake.
It will be interesting to see how variable rates go into 2010, at the end of the day it is a gamble, and I'm not one to gamble but in this instance I'm playing.
I'm talking about people who intend to fix, and particularly whether or not they'll be better off waiting for potential further drops - not debating whether it's better to stay on variable or not.
For those who want to fix, I believe the time has come/gone if you're trying to get the lowest rate. I'm now paying higher than the variable I was on, but quite happy with the decision. I like the certainty of fixed rates and only unfixed last year because blind Freddy could see rates were in for a big slide. End result, I remained unfixed for about 8 months in total and am now locked in again at 2% lower than I was with the same end date.
Hi WTBW. Please define short term for the purpose of your poll anyway.
That's what I was meaning too.. For someone waiting for further drops in the fixed - in the meantime they will be on the variable (1% lower). The longer they wait, the more they save, and the less crucial it will be for the fixed to be as low as the previous low.. assuming it will come back down
I see a good point in your post.
Cheers.
Cheers.
That's what I was meaning too.. For someone waiting for further drops in the fixed - in the meantime they will be on the variable (1% lower). The longer they wait, the more they save, and the less crucial it will be for the fixed to be as low as the previous low.. assuming it will come back down
Hi, I should have defined a little better, sorry.
I'm thinking that the cash rate will hit its lowest point towards the end of this year so short term being the next six months.
I'm thinking that the cash rate will hit its lowest point towards the end of this year so short term being the next six months.
Thanks. Vote now in.
That's what I was meaning too.. For someone waiting for further drops in the fixed - in the meantime they will be on the variable (1% lower). The longer they wait, the more they save, and the less crucial it will be for the fixed to be as low as the previous low.. assuming it will come back down
Fair point. To be honest I doubt whether making the move now (as I have) will necessarily be cheaper over the period - it's not my motivation. I like having fixed repayments to allow me to budget, especially now that at the lower fixed rate some of my IP's are positively geared. As you pointed out, a person could well be better off over the term by staying on variable longer and fixing later albeit higher -that's the choice I/we have to make. Again I vote for security.
I'm staying variable for now. I'm organising finance pre-approval for my development at the moment and my bank has offered me another 5bp on top of my current 80bp discount to standard variable. 85bp is nice and means my total borrowings will be at sub 5%, about what that "awesome" 3 year fixed rate was a couple months back.
I figure it will take me a year or so to develop it and I might look at fixing a fair portion then. I don't think rates are going anywhere in the next 12 months. If anything they'll all come off a bit more, fixed included. Inflation? You're kidding right...
But that's just my guess...
Cheers,
Michael
I figure it will take me a year or so to develop it and I might look at fixing a fair portion then. I don't think rates are going anywhere in the next 12 months. If anything they'll all come off a bit more, fixed included. Inflation? You're kidding right...
But that's just my guess...
Cheers,
Michael
I have been posting on a lot of threads re fixed rates and yes,
IMO I dont see variable rates rising before end 09. I see another 0.5% drop and that will be bottom for variable. Then it is case of getting the best fixed rate at that time considering you are 1% lower for another six months.
Overall it is all good considered to last year. I was cleaning out some old files and found money papers from mid 08 offering 8% return on cash. 8%! Infation rampant! etc...So working on that proof that no-one knew what was about to happen then, we cannot predict the future from reports.
Thus the trick I see is to have a strategy for your IPs and to invest on that. I am presently unfixed and if I fix, I am sure to win. But if I want to sell in fiture being unfixed is good.
Knowing your strategy is the trick. So considered all my IPS are +Cashflow at the moment, I should lock and forget for 5 or even 7 years. Rents are not getting any cheaper in this market and the cost to build is rising in VIC with the new fire regs, green concerns etc..I could sell now and clear $80k on two IPS but then what do I do? Punt on shares
My 2 cents, Peter 14.7
- pick the bottom and
- when to lock is the two parts of the equation.
IMO I dont see variable rates rising before end 09. I see another 0.5% drop and that will be bottom for variable. Then it is case of getting the best fixed rate at that time considering you are 1% lower for another six months.
Overall it is all good considered to last year. I was cleaning out some old files and found money papers from mid 08 offering 8% return on cash. 8%! Infation rampant! etc...So working on that proof that no-one knew what was about to happen then, we cannot predict the future from reports.
Thus the trick I see is to have a strategy for your IPs and to invest on that. I am presently unfixed and if I fix, I am sure to win. But if I want to sell in fiture being unfixed is good.
Knowing your strategy is the trick. So considered all my IPS are +Cashflow at the moment, I should lock and forget for 5 or even 7 years. Rents are not getting any cheaper in this market and the cost to build is rising in VIC with the new fire regs, green concerns etc..I could sell now and clear $80k on two IPS but then what do I do? Punt on shares
My 2 cents, Peter 14.7
I have been posting on a lot of threads re fixed rates and yes,
- pick the bottom and
- when to lock is the two parts of the equation.
IMO I dont see variable rates rising before end 09. I see another 0.5% drop and that will be bottom for variable. Then it is case of getting the best fixed rate at that time considering you are 1% lower for another six months.
Overall it is all good considered to last year. I was cleaning out some old files and found money papers from mid 08 offering 8% return on cash. 8%! Infation rampant! etc...So working on that proof that no-one knew what was about to happen then, we cannot predict the future from reports.
Thus the trick I see is to have a strategy for your IPs and to invest on that. I am presently unfixed and if I fix, I am sure to win. But if I want to sell in fiture being unfixed is good.
Knowing your strategy is the trick. So considered all my IPS are +Cashflow at the moment, I should lock and forget for 5 or even 7 years. Rents are not getting any cheaper in this market and the cost to build is rising in VIC with the new fire regs, green concerns etc..I could sell now and clear $80k on two IPS but then what do I do? Punt on shares
My 2 cents, Peter 14.7
Good post. It all comes down to your strategy and SANF. Personally I stagger all our loans so that we have no more than 1/3 falling due for renewal in any one year. Hopefully it means that I will minimise the effect of coming off at a very high interest level by having it affect only 1/3 of the value of the portfolio. If I had a smaller portfolio I might want to punt on trying to pick near the bottom but with a larger portfolio I like to control risk.
Cheers
Shane
Strategy!
Peter Spann spoke at SIG and said one the great lessons he had to pass on was "have a strategy". He advised early on he bought, sold and make profit with thinking about a long term plan. He said that was one of his greatest mistakes was not considering his strategy for investment.
Peter 14.7
Peter Spann spoke at SIG and said one the great lessons he had to pass on was "have a strategy". He advised early on he bought, sold and make profit with thinking about a long term plan. He said that was one of his greatest mistakes was not considering his strategy for investment.
Peter 14.7
