Interest Rates and Fixing your Loans

Interest Rates and Fixing your Loans

What are rates doing? Should I fix now to lock in a low rate?

There are a lot of people concerned about interest rates after the decision by the major banks to increase their rates outside the RBA increase this month.

A lot of people are confused about what rates are doing and whether they should lock their rates in.

We get reports through from a lot of leading economists about rates and their rate predictions and we often get asked about our thoughts on what rates are going to do.

Its always a crystal ball question because the economists don’t always get it right.

It would seem that quite a few of the economists are saying now is a good time to lock in your home loan to a fixed rate because although quite a lot are predicting the RBA to either decrease rates on Melbourne Cup Day or at their December meeting most feel that the banks wont pass on the rate cut in full (if at all).

Before you lock into a fixed rate its very important to consider the implications which can be (and not limited to):

– with most fixed products you can’t pay more than $192 a week off the home loan without penalty ($10k a year)

– with most fixed loans you can’t access the redraw during the fixed period so you might want to consider taking out funds in the redraw prior to fixing if you know you will need access to those funds

– you cannot sell or refinance the property without penalties

I am quite happy to have an obligation free appointment with anyone wishing to discuss the options available and this can be a face to face appointment at our office or over the phone/skype.

Please give us a call to make an appointment Ph 49190478