Hi
My partner and I own 4 properties between us. 3 ip s and our home. At present we let them out short term with a good return. It’s out first year doing it, so we still taking the shortfalls. Our aim is not to buy and sell short term, but to keep the properties for retirement. Short term stay is working for us. We have a property loan at $310 000, with a fixed rate of 6..69% fixed for another 3 years. We have one that is $154 000 at 7.37% variable and one that is $ 145 000 7.52% variable. Our home is $649 00 variable 7.37%. With rates keep going up, we can lock in the investments for 3 years at 7.19% or 4-12 years at 7.39% . We have about $42 000 in our home loan. What would anyone suggest we do in maybe locking half of our home into fixed. I don’t forsee the interest rates dropping or staying the same. Does anyone have any advice. ThanksPredicting interest rates is a tough call for anyone at the moment. Some expect it to rise further others say because of the draught, interest rates next year may soften. Whom really knows, if you lock in you are stuck at a higher price if falls, if you dont you get left behind if a rise.
Hedging your bets as you have suggested is one way. Lock in part and leaving part on the table. It was interesting to see that after the last rise, although most lenders initially increased the rates it did not take long for the fixed rates to drop back to where they started before the rise.
They may have done this due to their long term forcast eg potential for drop; or maybe just to propt a slowing market.
You are right I havent really given an answer as it all boils down to personal opinion and what you are comfortable with.
If you are concerned that if there is a rise you may strugle with payments, this could influence your decision for fixed. If a little fluctuation in what you pay does not matter then you may choose variable.
Wayne Skewes
Mortgage Broker
Email [email protected]
http://www.eaussie.com.au/Mortgages/Aussie_Mortgage_Adviser.asp?ContentID=852280
Refinace, Loan Consolidation, Owner Occupied or Investment Finance. Free Service I come to you!Hi Wayne
Thank you as we do short term stay our prices can fluxuate too, thank you for your insightAs the ANZ is offering fixed rate for 10 years at 7.55% and the fixed is usually more than the variable, and because I think the banks are really clever and make milliions, I cant see them offering said 7.55% if they think the next interest rate adjustment will go up. Whats everyone else thoughts on this?
Fern
The trouble with fixing, is if you want to sell or move to another bank, and rates move against you, you can be up for thousands to break the loan.
Antwa, you have a lot of loans, if you moved them all to the same bank, you may get further discounts. ie 7.27% on standard variable.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
