All Topics / Help Needed! / Fixing interest rates

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  • Profile photo of rpequerpeque
    Member
    @rpeque
    Join Date: 2013
    Post Count: 3

    Hi,

    Just want to know the general opinion of people on fixing interest rates. Having for example 2 properties with two separate loans

    with the bank. Current rate is 5.6% but if I fix it will be 5% for 2 years.

    Thank you in advance.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Maybe it'll go up, maybe it'll go down.  You need to ask yourself the impact on you if it does go up.  Pick where your happy number is and lock it in so you can sleep at night.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Fixing is good if you need to know what your monthly repayments will be each month – so for budgeting purposes it can be helpful.

    In general, fixed rate loans aren't very flexible and not many of them allow for an offset to be linked. We can get around this by keeping a portion of the loan variable.

    All in all, I wouldn't fix in an attempt to "beat" the variable rate. I would fix if you need some certainty in your repayments.

    The break costs on fixed rate loans are usually quite high as well – so you'll need to be sure that you won't be closing down the loan during the fixed rate period.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of rpequerpeque
    Member
    @rpeque
    Join Date: 2013
    Post Count: 3

    Thank you Jacqui and Jamie.

Viewing 4 posts - 1 through 4 (of 4 total)

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