Fixed rates to rise

Agreed Jess. But not worth breaking to get a higher rate. Besides anything over 3 years is to long for me, to much can happen. I'm not convinced yet, that fixing longer term is a good idea.

 

I must admit that has always been my view, along with why pay a higher interest rate now for fear of what may be at some uncertain time in the future? If the uplift is only 0.6% then maybe that's a good deal in terms of likely to rise that much in a relatively short time-frame. Over the years on my PPOR whenever I have looked at fixing I have decided against it and I believe have always been better off. With record low rates that might not be an indicator of future performance

 

No, zero point breaking to fix a higher rate.

 

I would think it is safe, because no one is going to want to drop much more, investments will be useless, I think they will raise soon, and will likely at least follow US rise.

Like market pricing, there is an up trend and a down trend, I would say close enough to bottom as no one will pick exactly.

The real point of fixing though, would be to know what your outgoing is for x amount of time.

 

Re fixed rate "product"

I am not familiar with the whole mechanism, but I had in mind that fixed rates must have been because the lender was going to go off and also fix by buying at a rate for set term to match the offer pricing + margin & term.

 

Yes, the way I understand it (I now have three loans fixed) is that the bank is getting you the money at a fixed rate as well, which is why they charge you such high fees if you break. They are essentially stuck holding the bundle as you sail off into the sunset onto a variable rate. They aren't going to wear that.

 

Macquarie's announced some changes

 

Hope people got them locked in before this. Seems .5 or.6% is what the 5 yr rates are moving!! Big difference in the P&I and IO rates with Mac? Do many others have a .25% difference in their rates between IO and P&I?

 

I missed the good 5 year rates. If I wanted 3 years, the rates are:
1) investors 3.99% fixed for 3 years.
2) OO is 3.89% fixed for 3 years.

 

Interesting. I didn't know fixed rate can be negotiated. CBA currently advertised 3 year fixed OO 3.89%.
I applied this via Broker channel and was surprised to get 3.84% without haggling. The current IO period is expiring next year and I was able to extend the IO term to match the 3 year fixed too....

 

As of this morning Commbank have moved. There 5 year fixed (if on the wealth package) has gone from 4.14 to 4.79 which is a huge jump.

 

Ouch!

 

There are some Historial data show the chance of saving money by fixing the rate for different terms
How Long Should You Fix Your Home Loan Rate? - CANSTAR

 

Good article. I'm surprised they have data showing 50% of fixers save money. Last statistics I was aware of was closer to 20%. Not surprised 1 year was the most likely to beat the banks and 5 years the worse.

 

I am looking at a perspective that if I fixed it for 3 years at 4%. My property returns 6% minus outgoing expenses leaves me 4.5-5%... still CF+ and a SANF for next 3 years as I am too keen when IR goes up or down..

 

I know fixing is risky at times but in my case I can fix for 3.89% and 3.99% for 3 years. I don't see that as risky.