Found a potential investment and would like to ask wether its advisable to take a fixed loan for 5 years (?) or fluctuating. Anyone / Thanks.
Depends on your comfort level. When I started I fixed it for 5 yrs. Now most my loans are fixed.
Probably paid more interest than I should have over that time but i hate all the talk about rates going up. By fixing I can sleep better at night.
You can go fixed, as there may be rate rises in the future, but it’s getting hard to predict (high $A keeping inflation down, etc). Alternatively you can boost your cashflow with I/O loans.
Rgds.
Lucifer_auAlso bear in mind, if you were to sell the property or to refinance within the fixed period, there could be very high exit fees, depending on the rates at the time.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Re should you fix – depends on a number of factors, but if you a)want/need absolute certainty re repayments, b)know what you will do with the property (keep/sell) for the forseeable future, c)don’t intend to pay the loan down much if any, d)believe the rate is going to be competative over the fixed period, then yes, maybe you should fix.
theloanarranger
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