Hello
I have always taken out PI variable loans with offset a/c to buy my properties. However from reading the forum it seems as if I am the exception. I currently have 3 loans covering 2 properties and am wondering what I should do.
How do you work out how much of your loan to fix.
Is this a good time to fix some/all of the loan(s) and for how long.
What should I take into consideration.
Thanks in advance. [smiling]
ElkaYou should take into consideration your views on rates, but also the inflexibility fixing creates – it may be harder and more costly to change lenders. And this could hinder your expansion.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Bear in mind that this is simply my personal opinion based on my own limited research and resources and should not be considered specific financial advice blah-blah so sue me.
I think interest rates are going to rise much faster and much further than even the most extreme of mainstream commentators are currently predicting.
That’s all. If I had loans I’d be fixing them.
F.[cowboy2]Thank you both.
Both your posts reflect my own feelings which is why I have not been able to make a decision. The contrdiction of these two interests (no pun intended [smiling]) has been paralizing me.
Thanks again
ElkaHI Elkam,
Why not have a bit each way – fix some of your loans and keep some for flexibility purposes.
This is what we do – a bit each way.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
Skype – derekjones2113Hello Derek
That is the way I have decided to go. A bit each way.
Hopefully I will have it in place before the next (August??) rates rise.
Thanks for the “push” [smiling]
ElkaOriginally posted by foundation:so sue me.
Carefull F. someone might take that as advice.[biggrin]
I heard from a reliable source (but have not looked into it myself) that over ANY 4 year period that variable was cheaper. Yes ANY 4 years including the late 80’s.
CATA
Asset Protection Specialist
[email protected]Interesting comment Cata
Now that I’d like to check. [hmmm]Anyone know where to find interest rates by year?
Elka
Hi Elka,
Stuart Weymss wrote an article along these lines for API – a copy of it is available on his website
http://prosolution.com.au/free_articles/articles.php
The article in question is down the page a little so you will need to browse a little.
Cheers
Derek
[email protected]
http://www.mononpoly.tic.com.au
0409 882 958
Skype – derekjones2113Great link Derek.
Not only on the topic of fixed interest but on loan structuring and much more. Thank you.
Now I’m more paralized then ever. [glum2]
Actually ANZ has an interesting product, I think. A 1 year fixed loan with offset account. I checked and the interest is calculated daily so you are getting the full advantage of the offset account. The interest charged is the same as for a 3 year fixed loan.
Any thoughts.?
Elka
Hi,
Variable is best for flexibility usually, and offset is good idea of that.
Rates rise are a real issue for some right now. Up until recently I would only use Variable myself too!
I have found one loan that has the best of both worlds. You can fix it for 1-5 years but has an attached 100% offset account!
This the only fixed rate loan with this facility I have come accross ever!
But your circumstances might mean you need to re-finance, even with your current lender possibly, to go fixed.You need to balance the re-financing costs versus the security of fixing in this uncertain environment.
Cheers
JohnHello John
Would you share the name of the lender and or loan … or do we have to do our own legwork. ?
It would be interesting to see the ifs and buts of this loan as it does sound like a great option. As I posted, the ANZ has a 1 year fixed with offset loan but a 3 year with offset would be my prefered option.
Thanks [smiling]
ElkaHello all
As I hate unfinished symphonies I thought I would post the result of your advise.
I have fixed half my loans for 1 year using the ANZ fixed with offset loan … all for free as I have a pro package.
I have structured it so that only 1 property is affected leaving 2 others with variable loans for flexibility.
BTW. It appears that the ANZ is not doing drive by valuations any more. I had 2 properties revalued (again for free as part of the package) and not only did they do an internal inspection, they did it using a tape measure. Is that a sign of the times?
Thank you all for your help. [smiling]
Elka
Hi elkam,
Im on the pro package with ANZ as well. I had 2 properties revalued a week ago. Normally they would do a drive by for both but i requested a internal inspection in one (lots of renos). The other was just a driveby by my request.
So i think its still the same if you request it.
Cheers,
Damon
In theory, there is no difference between practice and theory, in practice, there is….
have always taken out PI variable
Hi, pretty new to this, so appologies for what is probably a simple question.
What is ‘PI variable’ as discussed?
(Mind you, old Chinese proverb goes like “Any question with an answer is worth asking”)
Thanks.
JamesOriginally posted by JamesMc:have always taken out PI variable
Hi, pretty new to this, so appologies for what is probably a simple question.
What is ‘PI variable’ as discussed?
(Mind you, old Chinese proverb goes like “Any question with an answer is worth asking”)
Thanks.
JamesPI variable = Principal+Interest Loan with Variable Interest rate.
IO = Interest only
Cheers,
Damon
In theory, there is no difference between practice and theory, in practice, there is….
Thanks Damon.
I knew it would be simple.
James
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