Do you think it's time to change my home loan interest rate from variable to fixed? - fixed interest savings
The Commonwealth Bank interest rates for their products, has fixed and variable increases, do you think people should now considering moving to a fixed rate mortgage?
Thursday, January 14, 2010
Fixed Interest Savings Do You Think It's Time To Change My Home Loan Interest Rate From Variable To Fixed?
7 comments:
Why should such a risk? - Do not repeat this - we do not know what the interest rates in the future.
Using the ABC, for example, the current variable rate 5.74%. Their interest rate is fixed for 5 years, 7.34%, so that when these triggers, you should deal with interest payments amounting to 1.6% extra. So why not put aside enough money to another account, you can earn some interest for you. Your daily budget is allocated in the same way - without you the amount of 7.34% annually of your loan. If the variable increases, then you reduce the amount you set aside and pay interest rates higher. Your daily budget is the same.
But if interest rates do not rise, you get the money to keep booked by you. You can continue to grow until the loan is repaid, and maintain a buffer in case of a variable interest rate to 3 or 4 years or more. Finally, you can use to pay a little more of your loan than to pay the bank as interest rates, which show nothing for himself. But reached by the variable interest rate 7.34%, ahead of us.
Setting possible only makes sense if the speed is not higher than the variable can be set. But this is not the case, is meaningless.
Of course, if you can not afford the additional labor share, then tells me that his budget is also highlighted. In this case, you need to talk to your bank or financial advisors to better manage their finances. No one should be a loan at a time that stress was not tested in the interest rates at least 2% higher than at the beginning of the loan. And I think aside, I should be 2% over anyway, so go less if interest rates rise in the future to get used to.
If people are more energy into this kind of thing, if they should borrow money for a house will not be highlighted by the first signs of a possible increase in mortgage rates.
I talked to my bank yesterday informing them that the variable interest rate, which is affected the Australian economy and the pace is set by the global economy (not) at times and that of others.
I had a fixed interest rate loans, we decided to break so that we are) a variable (for an enormous cost, but money wise it actually worked better, because we now have to pass a variable 5 can, 16%, but if They go back to crawl to safety, then we will re-examine the establishment, so we know that each week the amount of the refund to us and not a shock if they continue to grow.
1992 In year (six months after we got married) 16% achieved, and it is terrible that the money to see every week. Do not think I can go much lower, but surely rise much higher.
The banks have to estimate typically work for many people they are and which are generally fixed-rate interest will be paid for their greatest advantage. It's a little late, unless you intend to fix for a very long time, over five years. And it also depends on your situation, whether to sell the investment property that is sometimes in the near future or principal residence. It also depends on how much money you still need it, and if you plan to pay more than the minimum interest payment only.
If you have any doubts, look at the 50:50-in fixed and variable. But for me, I'd rather try my luck with the variable, I think the sentence is not going anywhere for the next two years, and a slight movement of the third year.
It's not too late to change your attitude. Fixed rates on short-term and long-term is still very reasonable. I worked in insurance / banking / finance for 23 years (but I'm not in sales), an owner for 15 years and have seen the ups and downs. I would recommend anyone to block all types of businesses as long as possible.
Once the interest rates in the last 20-30 months decreased significantly, he may again be increased.
Do not be greedy and expect perhaps that deserve further 0.5% and a decrease of 1.00%. It is unlikely, and although it can happen, do not outweigh the risks. The longer the delay at the current rate to increase with greater probability.
Lock-up now while you can.
It's not too late to change your attitude. Fixed rates on short-term and long-term is still very reasonable. I worked in insurance / banking / finance for 23 years (but I'm not in sales), an owner for 15 years and have seen the ups and downs. I would recommend anyone to block all types of businesses as long as possible.
Once the interest rates in the last 20-30 months decreased significantly, he may again be increased.
Do not be greedy and expect perhaps that deserve further 0.5% and a decrease of 1.00%. It is unlikely, and although it can happen, do not outweigh the risks. The longer the delay at the current rate to increase with greater probability.
Lock-up now while you can.
I think it depends on your situation. If you decided not to pay more than $ 10K per year for the lender, which requires, then a fixed interest rate is not bad. Fix for 5 years for increasing variables on the road worthwhile. Or you can divide the loan with a fixed ratio and variable.
I pay above the minimum wage required by the creditor, and therefore need a variable to hold, so that might cause a redesign or installation of scrolling.
It is a question of interest. If you have to give the right to the interest rate is almost irrelevant. Options View "mirror" line of credit over 80 years. But without cheating. The best place to look is with brokers, banks do not. Banks will not give you all the facts. Brokers work on their behalf and are paid by the banks as commission, it costs you nothing and everything to win. Believe me, myself and I have a 30-year mortgage, I paid in full in just over 18 mid years.AND rate is not fixed, not even the "best market" and all ... . I laugh all the way to the bank! Sorry for the pun
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