Would you go 5yr fixed interest OR variable with offset?

[rugrat]

I am having problems at the moment deciding between the fixed interest and the offset accounts. We are getting a loan through Bank of QLD (provided our equity is released on our current home loan) - they are our best option (we don't have many) as we need a 95% home loan.

So we are stuck between going the 5yr fixed and setting up a cheque account seperate for the IP finances. Or going the variable rate with an offset account.

So my question is what would everyone here do? And why?

obviously the benefits of the fixed interest is that we would know what our repayments will be for the first 5yrs.

On the other hand I don't think rates will be going up anytime soon (tell me if I am wrong), so maybe it isn't a big risk in the short term anyway???

 

[rugrat]

***Bump***

 

[danwatto]

I'm going for both. 80% fixed 5year 5.79%, 20% variable + offset.

 

[Perth Investor]

I like Dan's option, it's always good to keep some on variable for the flexibility and offset, but if you fix most of it you guarantee most of your payments, minimising risk.

 

[Edmond Dantes]

I've just done 60% variable, 40% fixed. I still keep my 100% offset for the variable.

 

[The_Bludger]

I've just done 60% variable, 40% fixed. I still keep my 100% offset for the variable.

What rate did you fix and was it 5 years?

 

[Edmond Dantes]

What rate did you fix and was it 5 years?

Yeah 5 years, 6.69% with CBA. I was so busy at work yesterday that missed the last day to fix!!! it would have been lower.

I know it's not the best rate, but:

- I think fix rates will only start going in one direction (up).
- It's only 40% of my loan
- Finally stopped with my rates analysis paralysis. Got tired of reading historic figures, projections, and so on.
- Still have 60% of my loan variable at 4.94% with offset.

 

[Qinau]

Personally I fixed 60% yesterday and left the offset attached to the variable portion.

Cheers