which loan to take?

Hello all.. im borrowing up to 95% loan and im torn between a higher rate that is fixed or a lower rate that is variable. Currently westpac offer 2.29% variable but no offset account!
And if i wanna find something with offset account i gotta go higher, and pay an annual fee.
fix rate is up to 2.99% but limits extra payment and offset is only 4%.

care to advise which is better? I wanted to go for 2.29% but thought i might be enjoying 2.29% for one month only if it changes next month and losing the benefit of an offset account?

 

Its first home owner buying an established house for owner occupancy. It will be P&I.
No monthly fee for the one without offset.. or annually 369 and higher rate for one with offset..

And how often does variable interest changes? Do they change monthly?

 

How much money do you expect to put into, or be putting into, the offset account (e.g. via savings)?

 

i reckon all my money will be in there! eventually at least 10-20k i reckon. all savings will go into offset.. naturally i would go for the lowest rate. But lowest rate doesnt mean i enjoy the lowest rate the next month? how often does rate change for mortgage? and if it changes to a high rate and no offset account i reckon its kinda silly?

 

also... out of curiousity.. why sign on to a low variable rate that is promoted by a lender... when it can change the following month? is this how variable work? changing every month?

 

how do you think variable rates work? A rate that doesn't change would be called a..... fixed?

And when rates go down, variable rates will go down too (as many have enjoyed over the last couple of years).

 

would you fix a rate now at this point? is interest rate still low? well pardon me cos this is the first loan in my entire 23years

 

i always thought when variable rate goes up.. fix rate does too.. so even when you're on variable and the rate goes up.. u're still generally lower than the new fix?

 

a good bank will make sure you end up paying MORE than variable if u are on fix? good in the sense that they are good at making money?

 

well i understand.. sometimes fix rate do sound too good to be true to think that you are on a good rate for years .. they dont do losing business

 

i've been hearing many things and thats the reason why i am here to get some feedback and understanding. i know at the end of the day it really "depends" on different circumstances. im a first home buyer with low deposit and might struggle if interest rate shoots up.. so i wanna be clear on what the benefit is on signing a "promotion rate" which is so attractive.. because it is so low.. and yet im confuse on what is the point of signing on this attractive rate when it might go as high as the fix rate that im looking now? haha

for example westpac has got a variable rate of 2.49%.. and fix rate of 2.99% .. why would any one sign on to the low rate when it might get over the fix rate in a few months time?

 

they also have a basic variable at 2.49% .. and another standard variable at 3.29% .. why split them into two different packages when the basic can end up at the same rate as the standard variable? am i understanding this right? 2.49% can eventually become 3.29 or even 4% ? and what happen to their standard variable rate? goes up to 5% 6% ?

 

Definitely see a broker. Probably split the loan. Get some certainty from a fix and keep some variable to offet.
I’m fixed at 1.99% and 2.29% so shows that fixed makes sense if you pick it right.