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Fixed Rates: When do I lock in my rate?

Wed, 18 Mar 2009 16:38:00 GMT

The million dollar question - when do I lock in my rate? The answer to this question is different for everyone. You should concentrate on when you think it is time, not when is it time. With fixed rates extremely low and some rates hovering very close to the sub-5% mark, if you fixed your rate now and rates went even lower, would you really care?

Everyone is different. Some people want to play the market and wait until what they consider to be the last possible moment before they choose to fix in their interest rate. Just be aware that once the rates start to rise, you may have already missed the bottom of the market.

Also remember the restrictions that come with fixed rate loans. You will have a limited ability to make extra repayments, often no redraw facility and higher costs, including the dreaded 'break cost' possibility. It is not for everyone, seek our advice and call us to discuss your options before you make a move.

Interest Rates: How low will they go?

Sun, 01 Feb 2009 08:22:00 GMT

With the RBA Board Meeting set for 3 February, speculation is rife as to how low rates will actually drop. We do not have a crystal ball, but we do stay abreast of a lot of economic commentary in the market. Most economic forecasts predict further drops in the official cash rate throughout the course of 2009, with variable rates possibly set to go as low as 3.5%-4%pa. Most commentators view this type of range as the true bottom of the variable interest rate market in Australia, however whether we get there or not is another question.

How do i get out of my high fixed rate loan?

Thu, 15 Jan 2009 15:35:00 GMT

Those borrowers who fixed their interest rate before the sharp rate decreases are finding they have very high break costs to break out of their fixed rate and convert to variable. Break costs in the range of $30,000-$40,000 are not uncommon. The short answer is that there is not much you can do except weigh up whether this cost is worth paying in your particular circumstances. In most cases, the best position is to unfortunately just sit with your loan and wait out the fixed rate term.