What rate should I fix my investment loans?

Hi all

I have two IP loans, about 400K and 500K respectively.

I am going to fix the loans and my lender has given me the following 3 options:

2 years at 2.28%

3 years at 2.28%

5 years at 2.63%

My lender is Suncorp and I know there are better fixed rates out there, but for reasons I won't go into, I won't change my bank.

Thank you.

 

Depends, do you intend to sell/refinance within the next 2, 3 or 5 years?
5 years is a long time, a lot can happen in 5 years.

 

What do you think rates will do in the future?
Do you need the certainty of fixed rates?
Do you have plans to refinance or sell?
If you need offsets, can you get them on fixed loans with Suncorp?

 

Both IPs are long term investments, in Sydney and Melbourne and I plan to hold long term.

Agreed about 5 years being a long time.. I'm leaning towards 3 years.

 

I think they will increase over the next 2-5 years. I plan to hold both IPs long term.

No offsets available with fixed loans.

 

Is that P&I or IO rates?

 

Fixing the loans for different periods would give you some flexibility in the future and help to avoid the shock of all of the debt reverting to variable at the same time. (e.g. if you fix both loans for the same period, it is quite possible that rates will have increased during the fixed term and you could be faced with a significant increase of repayments).