Discussion in 'Loans & Mortgage Brokers' started by Jmillar, 5th Mar, 2020.
What is the consensus on best time to fix rates given what's going on at the moment?
When it meets best your own personal criteria.
When rates are moving in an upward direction
I've been watching interest rates for over 20 years, been in the mortgage industry for 16 years. I have an investment portfolio and quite a few loans, some fixed, some variable. I've seen booms, busts, rates going up and down. I've been ahead, been behind on my rate predictions. I've observed some of the nations top economists. Here's what I know for certain...
Most people can't make a reliable rate prediction beyond about 3 months.
If you feel rates are near the bottom, by all means fix. Be prepared to live with the consequences, good or bad. If you can't, stay on variable.
Inflation has been tracking mostly below the RBA target rate (2-3%) for years now. I would hold off fixing until we see inflation convincingly above or at least heading toward 3%+.
Australia Trimmed Mean Inflation Rate | 1983-2019 Data | 2020-2022 Forecast | Calendar
100%.. there is so much more to it than just the rate & you'll only get opinions from people who can't speak to your circumstances.
What I would say is if you are fixing make sure you get it through the right lender at the time as there can be a huge spread. I saw one last week which had been fixed with "Lender I" at 3.75% when at the exact same time they took out the loan "Lender S" had the same term fixed loan for 2.89%. Not ideal!
On this... here is a chart with the annual inflation rate, if there was a rate hike during the quarter it appears in red (I marked it at the 3% level to make it easy to see when they start hiking relative to their target).
I'd usually fix at 2:37pm because I like that time. Not much research involved
I'm fixing now on 5yr IO and 3yr fixed as it suits my circumstances. Fixing 3x loans and taking one from P&I to IO is saving me around 16k per year on current rates. This will make properties well and truly positive.
Given we are buying PPOR this year, it will assist with putting as much cash as possible into this.
Stability is key for us as we have had a significant setback in life last year. So my wife will be off full time work for another year or so.
Lets see how QE goes
Did you fix?
Any more people looking at fixing with the state of the economy?
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