Fixed Vs Variable

Discussion in 'Loans & Mortgage Brokers' started by Levent, 29th Jun, 2018.

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  1. Levent

    Levent Member

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    13th Dec, 2017
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    A hot topic at the moment is IO loans being roll over into P&I loans and there are many threads discussing these changes. In this current climate, with people suggesting interest rates from what I have been reading are more likely to go up than down over the next few years would suggest to fix them, what is everyone's view on fixing compared to variable rates.
     
    Levent, 29th Jun, 2018
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Gold Coast (Australia Wide)

    There are some great fixed rate IO investment rates around at the moment.

    Fixed or variable, there is no simple answer, and it depends on risk tolerance, buffer capacity and what one will do with the property etc

    ta
    rolf
     
    Rolf Latham, 29th Jun, 2018
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  3. Athikalaka

    Athikalaka Well-Known Member

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    AU
    Most of my loans are fixed P&I but if rates were to move either way, I'm not stressed nor kicking myself with cashflow differences. I've committed and I leave it for the x amount of years as peace of mind.
    If your rates are variable, you will have that flexibility (& anxiety).
    Like @Rolf Latham It will come down to your current cash flow, risk appetite and loan structures if you're looking to fix a loan with an offset account.

    I only found out recently that my variable loan which has 100% offset also applies when I fix my rates. That's extremely rare and good to know if I want to fix the rate later down the track. The fix rate is about 40 bp higher than my current variable so I have breathing room for now but it can all change tomorrow.
     
    Athikalaka, 29th Jun, 2018
    #3
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