All Topics / Finance / Why not lock it in!!!

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  • Profile photo of stuck-at-twostuck-at-two
    Member
    @stuck-at-two
    Join Date: 2003
    Post Count: 54
    May 4, 2006 - 11:30 pm

    So why arent poeple out their locking half there mortgages in for fixed. (PPoR mainly)
    If your on the most common rate of around 6.62% and the fixed 1/2/3 yr rate is currently 6.79% If you lock in half your mortgage at 6.79, and the variable goes up in the next week or two (due to the .25 increase announced by Reserve bank) you will lock in 6.79, whereas variable will be 6.87… Besides, who actually thinks rates ar going to come down in the next year or two.

    I just wish I had of lfixed half my mortgage at 6.62 3months back when Westpac actually had their fixed rate lower than there variable..but hey they dont announce it, and I left my run to late!

    Pays to continually call your bank every so often and check fixed and variable rates.

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    May 4, 2006 - 11:43 pm

    Hi Stuck at 2,

    I fixed half of my loans on Monday at 6.49 for three years – interest payable in advance.

    I also managed to fix another loan at 6.06 almost three years ago – this is near the end of its fix period. And another which is half waythrough fixed at 6.85 – also for three years.

    I have left my other loans at variable rate to provide me with flexibility.

    But the point you make is valid if people are worried by increasing interest rates do not neglect the fixing option. In saying that there are some possible pitfalls that an individual should discuss with their broker.

    As an aside I wonder how many rate rises we will have at this time – I ‘suspect’ a couple.

    Derek
    [email protected]
    http://www.pis.theinvestorsclub.com.au
    0409 882 958
    Skype – derekjones2113

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    May 5, 2006 - 11:43 am

    Fixing loans can result in loss of flexibility. It can be much harder and costly to change banks if needed.

    Terryw
    Discover Home Loans
    Parramatta
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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