Loan is nearly fully offset but should i fix it knowing ill use the money eventually ?

Discussion in 'Property Market Economics' started by HBK, 6th May, 2022.

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  1. HBK

    HBK Well-Known Member

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    My ip loan is nearly offset just 70k left paying 3.4% variable i have high savings rate so by mid next year should be nearly fully offset.
    But i am looking at buying more properties tho so i will eventually use all the money in the offset which is once fully offset 240k.
    I was going to get a ip asap in perth but now with things going on i do kinda want to wait and see what happens in Sydney as i would like to buy a place here if theres enough of a drop. Im thinking 500k in mount druitt for a house ? Haha
    So KNOWING im going to eventually use all the money maybe in the next few months or in a year etc should i fix it and pay obviously more interest then what i would be now but also knowing rates will contine to increase therefore in the long term it would work out better ? Also if i fix id have to do it through cba which their rates arent that good anyways tbh .
    Obviously if i wasent going to use the money im better off how its set up now but i know i will be using the money.
    Thoughts?
    Thanks
     
    HBK, 6th May, 2022
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Unless u have one of the rare loans that can be fixed and offset ( eg Adelaide bank) you will be paying full interest from day one

    ta
    rolf
     
    Rolf Latham, 6th May, 2022
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  3. HBK

    HBK Well-Known Member

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    Yeah so whats your advice ?
    No loans with cba cant be fixed and offset
     
    HBK, 6th May, 2022
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  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Refi to a lender that will give you that magic product.

    On the other hand, the spread between fixed of say 3 years and variable is now pretty vast, how much do you feel the RBA will bump rates ?

    ta
    rolf
     
    Rolf Latham, 6th May, 2022
    #4
  5. KJA182

    KJA182 Well-Known Member

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    the fixed rate boat left around a year ago
     
    KJA182, 6th May, 2022
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  6. Morgs

    Morgs Well-Known Member Business Member

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    Yep...
     
    Morgs, 6th May, 2022
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  7. HBK

    HBK Well-Known Member

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    Meaning fixing it for a good rate ? If thats what you mean then ye i know
     
    HBK, 13th May, 2022
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  8. KJA182

    KJA182 Well-Known Member

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    Yeah the spreads between fixed and variable were super tight, sometimes fixed was below variable so it was an easy choice. (coz RBA was handing out free money to the banks, for 3 years at .25%)

    Now the rate differentials are huge
     
    KJA182, 13th May, 2022
    #8