To Fix or Not (considering what APRA etc are doing)?

It doesn't look like reserve bank is going to be raising rates soon with sluggish economy, poor wage growth, low inflation, yet APRA and other regulations, along with the banks desire to keep their margins, it seems like Investors and particularly IO loans are going to be get higher rates in near future (that's my take) regardless of what reserve bank does.

so wondering
1. if people agree with this assessment and
2. what rates are you getting for fixing for 3 and 5 years
3, and with whom?

 

The RBA would like to be able to put rates up to bring Melbourne and Sydney under control, but it turns out they don't have to, the banks are doing it for them (via APRA).

It doesn't matter what the RBA does, I can't see that investment rates will actually go down. If they reduce rates, the banks will only pass on a fraction of it. They'll then increase rates again for investors anyway.

There's plenty of lenders who have cheaper fixed rates than variable, in some case it's quite significant. If you're okay with loosing some flexibility for a period of time, fixing is probably the only way way to guarantee lower rates for the foreseeable future.

 

We're seeing a heavy push towards fixed rates currently for investors - due to the uplift in funding costs seeing a flow to higher interest rates for investors. With this trend currently going upwards, many are locking in the competitive rates offered by some lenders at this time.

Be careful fixing your interest rate with some lenders - some will require you to ensure your fixed period and interest only period are the same time period - which can mean you may reduce your interest only period dramatically and cause issues if this can't be renewed easily (which is certainly won't be able to without full reassessment of your financial situation by the time anyone comes off their fixed rates in 2+ years)