Whats currently the best 5 year fixed I/O <70%LVR rate currently going out there?
For investment? ~ 4.59%
Owner occupied ~ 4.49%.
Still a significant premium being paid for 5 year rates compared to say 3 year rates, which can be up to 0.7-0.8% cheaper than their 5 year counterparts.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Careful with locking in for 5 years though Dean.
If your situation changes and you need to refi/sell up you could be slugged with a high break cost.
Personally – I wouldn’t fix for longer than 3 years. You can plan ahead for 2 or 3 years – but any longer than that becomes difficult IMO.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Owner Occupied – 4.19%
Investment – 4.49%
As Jamie mentioned you can do a lot better on a 3 year rate.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I’ve been watching Newcastle Permanent rates this year. Fixed rates for 3 years are currently 3.89% (4.49% for 5 years).
Has anyone had experience with this bank? Seems like really good rates. I’m not affiliated with any bank, just watching with interest because my fixed rate periods with another bank are expiring later this year.
From what I can see, the rates are the same for Investment and Owner OccupiedThanks guys, my preference is always going to be for 5 years and understand it may cost for that “comfort level” (I just don’t trust Australian bank variable rates….and the fat dividends that go with Australian bank shares).
I agree though @corey the 0.7% difference on a $500k adds up at $3500pa however I think in 2019….just as rates start to go back up globally….going for the 5 year will be the smart move.
Not so worried about break fees etc as once locked in wont be needing to sell any of these IP properties for at least 5 years, these are all pretty much neutrally geared so even if lost job etc they wont be sold within the next 5 years. To be honest as sitting on over $1m in equity on PPOR we’d probably sell our USA apartment first if anything really “life changing” happened.
I am surprised though that 4.49% on a <70% LVR is the very best rate out there when people are talking about so much competition between lenders at the moment…… :(
Maybe someone will drop me a PM if they see a “special offer” cross their desks in the next month.
What are peoples thoughts on a drop of 0.25% by the RBA on Tuesday?
Still looking for a better rate on a 5 year fixed and hoping the RBA might consider Brexit/Election ‘non-decision’ until Tuesday at the earliest a good enough reason to drop rates and this can get me a better than 4.49% fixed 5 year.
They tend to let these type of things settle and see how it affects the market over a longer period of time. I don’t see a drop happening this tuesay although it would be good :)
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
DC why are you looking to fix for 5 years? personally I wouldn’t. Not sure about tuesday but I see 2 X 25 basis points cuts by the end of the year, and therefore would not be fixing. Would be great if big 4 passes on the cuts but that is a unknown. Rates are sharp at the moment – Westpac has a variable rate of 3.75 % variable rate (2 years) – up to you.
Cheers Ivan
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
http://redwoodadvisory.com.au
Email Me | Phone MeSMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS
I’ve been watching Newcastle Permanent rates this year. Fixed rates for 3 years are currently 3.89% (4.49% for 5 years).Has anyone had experience with this bank? Seems like really good rates. I’m not affiliated with any bank, just watching with interest because my fixed rate periods with another bank are expiring later this year.From what I can see, the rates are the same for Investment and Owner Occupied
Was a very loyal customer for years until I decided to retire (40) and lending became an instant issue for them.
They were happy to give out loans to someone with nothing but a regular payslip and 6 months history but not me
who generated well above the average wage with property, shares,managed funds. They became to small a bank to
handle my loans, the big ones jumped at the chance.Hi Redwood, looking to fix for as long as possible (eg have 30 years for PPOR) as helps budgeting. I also have seen over the years that Australian banks love fat profits on variable mortgages and make a much higher profit than most around the world and are happy to push up rates asap.
I’m not worried about needing to sell the next investment property in case of lifestyle hiccups as have other assets I’d sell first if something really bad happened.
I only wish there was an Australian bank offering better than 4.49% for 5 year fixed.
The fact that there is a premium between the 3 and 5 tells me that banks in Australia are expecting a rate rise sooner or later and although brexit may have pushed that out a bit I still expect Yellen to raise the fed in Dec 16 (which may help alleviate some RBA pressure) and as such anyone fixing today for the next 5 years will look like a genius in 2019 to 2021 etc.
@deancollins – I would look for a 2 or 3 year fixed rate as 5 years is a long time and a lot can happen that could trigger a sale of a property therefore incurring break-costs that could be substantial.
I see the short to medium landscape for interest rates continue to trend downwards, perhaps all the way to a zero cash rate and if correct fixed rates will continue to drop as well.
As always this is just an opinion so make your own mind up :)
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This reply was modified 8 years, 4 months ago by
Colin Rice.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
@colin, there would be no way we’d sell any of our investment properties within 5 years (forget the break mortgage costs….the stampduty/sales costs would be a killer for people to make such rash mistakes)
We have other “back up funds” that we have access to should there be temporary issue come up and even if a permanent loss of income should happen we still wouldn’t need to sell IP’s as we structure our loans for break even- we’d actually sell our PPOR if permanently incapacitated and downsize into a smaller apt/house as sitting on a substantial capital gain in our PPOR we could access.
having said that as much as I’d love interest rates in Australia to drop to 2%……I don’t see it happening this cycle – it would be nice to see long term rates (eg Australian 5 and 7 year) to come down though – currently the cheapest 5 year, <80% LVR, IO , IP I’ve seen is 4.49%…..anyone seen/know of cheaper??
Hi guys,
Are the above investment rates same for commercial as well?
Thanks,
FXD@fxdaemon rates for commercial are generally more than residential.
ING have some good rates and also dont do annual reviews as per the majors and most other banks. Its a set and forget facility that you dont have to be concerned about a review until the 5 year mark. Available as interest only and P&I.
ING DIRECT
Commercial interest rates effective from 4 August 2016
COMMERCIAL VARIABLE RATE LOANS Interest Rate (p.a.) Comparison Rate (p.a.)
New Commercial Borrowings <$500k 5.09% 5.16%
New Commercial Borrowings $500k to < $750k 4.99% 5.06%
New Commercial Borrowings $750k to < $1 million 4.89% 4.96%
New Commercial Borrowings $1 million < $2 million 4.69% 4.76%
New Commercial Borrowings $2 million+ 4.59% 4.66%COMMERCIAL FIXED RATE LOANS Interest Rate (p.a.) Comparison Rate (p.a.)
Commercial 1 Year Fixed Rate 4.74% 5.13%
Commercial 2 Year Fixed Rate 4.72% 5.09%
Commercial 3 Year Fixed Rate 4.68% 5.05%
Commercial 4 Year Fixed Rate 4.94% 5.11%
Commercial 5 Year Fixed Rate 5.02% 5.13%Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
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This reply was modified 8 years, 4 months ago by
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