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Are the mortgage rates going to go up

Discussion in 'Property Finance' started by Ranin999, 7th Apr, 2016.

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  1. Ranin999

    Ranin999 Member

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    Last edited by a moderator: 7th Apr, 2016
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Life isn't fair. You need to get over it and work with what comes.
     
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  3. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    Why ?
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    So fix your rates now. They're lower than current variable rates anyway. If you believe rates will go up, then this will save you money; unless you're wrong...

    Banks are currently offering the largest discounts they ever have. Competition is fierce and everyone always wants the lowest rate possible. This has to be paid for somehow and the consequence is that the banks will increase their rates to compensate for the discounts.

    Yes, it's not fair. It's not fair on the people who have done business with the same bank for years and are years later on a crappy deal because the banks are discounting for new customers only. The banks pay for consumer loyalty by abusing them.
     
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  5. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    If you don't like banks raising IRs outside of the RBA's IR decisions, then you have some choices:
    1. Don't borrow or don't borrow on variable IRs
    2. Borrow on fixed IRs
    3. ....or lock in a fixed rate so your repayments are a known figure each month
     
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  6. oracle

    oracle Well-Known Member

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    Already started.

    Full article here

    Cheers,
    Oracle.
     
  7. dabbler

    dabbler Well-Known Member

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    LOL....so true Peter, what happens sometimes is you then move on and don't come back for a long time, you think the abusers may have reformed, and then you learn the same lesson again :)

    The good thing is, you can now, with ease, pick and choose your abuser and level of abuse !

    To the OP, it has been talked about many times here, if you search APRA you can find old discussions.

    I think there will be a rise independant of RBA & if RBA cuts, would not be surprised if only part or none is passed on.
     
  8. jpcashflow

    jpcashflow Well-Known Member Business Member

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    I agree there are only a few options.
    1) Rates are sill low compared to anything we have ever seen,
    2) Fix loans.
    3) Don't borrow any more and start paying off debt,

    Even as a broker who earns a income when people borrow more, I am advising allot of my clients to start paying debt down.
     
  9. sash

    sash Well-Known Member

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    Look at the opportunity which it will present...if this happens....the banks will also offer attractive fixed rates to discourage people moving and lock in their existing customer base.

    I have in the process for fixing 2-3 loans for 3.99%. I intend to bring my average rage of interest from about 4.6% (unfortunately some loans were fixed at 4.79%) down to 4.2%. By doing this I will save the equivalent of 18-20k on my interest costs.

    Many ways to skins a cat....this is not going to change...you have to roll with the times. As someone said life is not fair.
     
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  10. jins13

    jins13 Well-Known Member

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    Read that traditionally, rates were around the 6 to 7% (sources unconfirmed). For me personally, I think I am good till it reaches 8% but anymore than that, I am going to find it hard.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    6%-7% was the average sort of rates that people paid until about 2011. Personally I think the average rates over the next decade will be about 1% lower.
     
  12. sash

    sash Well-Known Member

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    Yes....this time around when the rates get to 6.5%....the pain will be felt a lot quicker due to the level of debt people are carrying these days. 8% would be catastrophic for country.

    Imagine some paying 50k on their loan suddenly jumping to 85k!
     
  13. Luca

    Luca Well-Known Member

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    Agree...good opportunities ahead for people who have planned well & have cash!
     
  14. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    This has been talked about for quite a while - in the end we cannot have perpetually low rates and will see rises eventually.

    It's not a case of what's fair and what's not - costs will be passed on and business will try to maximise their profit. Thankfully as a part of this banks try to gain market share by being competitive with their offerings.

    If you feel that at higher rates that you might enter into a mortgage stress position, it may be worth evaluating now how you can mitigate this - through fixed rates, debt reduction, exit strategies etc.
     
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  15. Carrytrader

    Carrytrader Active Member

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    No surprises here. Bad debt charges on the banks books are going up across the board.

    They are using the execuse of rising funding cost but really they have to find money from somewhere to offset the loans that has gone bad. Shareholders come first.

    Nothing we can do since banks have pricing power due to concentrated market. End of the day, their money, their rules.

    Big 4 looking at $1billion loss from one company alone. Australia New Zealand Bank surprised market with higher than expected loan losses. It's not the end that's for sure.
     
    Last edited by a moderator: 5th Aug, 2016
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  16. Beano

    Beano Well-Known Member

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    [Qhave ="Ranin999, post: 193025, member: 5090"]I found this. This is not fair.


    Banks likely to raise mortgage rates[/QUOTE]
    I have not experianced increases in interest rate before
    What was the impact on the property market when interest rates increased and how much did interest go up by?
     
  17. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Last raising cycle was in 2006-8 when they were at 7-8.5%... then along came GFC and lenders slashed slashed slashed. Some unlucky punters like me were left with rates at 8.5% with ex Wizard now GE Money who would not reduce rates in line, and with no lenders lending, couldnt refinance.
     
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  18. Perthguy

    Perthguy Well-Known Member

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    Me too. I had 7 loans with Wizard when they sold to Aussie -> GE -> Pepper. My rates varied from 8.5% to 9.5%, all low doc. Those were some days of hefty interest payments. I was very lucky to refinance the lot to AMP, full doc, at 6.39%. Another issue, apart from the credit squeeze, was that lenders did not want to touch people refinancing from Pepper. They are the lowest of the low lenders. I didn't actually get out of the GE/Pepper loans until 2011, so it cost us at the time.

    Been there, done that. Doesn't bother me until rates are over 8% again.
     
  19. almostthere

    almostthere Member

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    So u still paying 8.5% ? Wow