Hi Paullie
I just fixed mine for 1 year, for 5.99% with Homeside. Feel free to join. I am not sure about 2-3 years, but I have done my calculation, the chance is very slim for my current variable rate (6.55%) to beat the fixed rate. From the gesture made by ANZ to lower fixed and raise variable, it seems that they hope people will fix their rate, they are willing to sacrifice profit margin for market share, and they care less to achieve that with variable rate, because there is no exit fees anyway.
Ferdinand.
It will be interesting to see what, if any, response to ANZ, Westpac's decision comes from Govt and RBA.
At the moment Wayne Swan is expending a lot of hot air telling the world how naughty and profitable the banks are, telling people to swap lenders (in a small market where the banks tend to follow similar interest rate paths), doing a bit of jawboning about the naughty banks and so on for what purpose – nil.
At the same time the RBA has made the decision to leave rates on hold for the benefit of the 'wider economy' because of economic conditions and so far two of the big four have stepped out on the own. In effect the profit margins of ANZ, Westpac have been seen to be more important by the two banks.
Time to move the economic levers from interest rates to GST manipulation.
This way all consumers pay proportionally, only the government is involved, funds raised go into govt coffers to be used for the benefit of the wider community and so on. The only problem with this is selling it to Joe Public and the fact we don't trust any government to use the money wisely and it is doubtful whether or not the GST board would manipulate GST rates or just put them a slow, but upward trend.
The ramblings of someone short on sleep.
Just an additional thought with fixing rates that you need to be aware of, and I must admit has been a gripe of mine for a while. You may do the shrewd thing, hedge your bets, and fix your rates for a year or two, BUT what you need to remember is tha in most cases you rate will revert to the standard variable rate afterwards – not any discounted rate you may have negotiated or have.
SUre you can renegotiate your loan after wards, and 'switch' (no charge with good banks) but the issue is that hypothetically say you circumstances have changed family or employment wise, you may not actually qualify for the same loan again, and in essense be stuck on a standard variable rate loan for years………which could well and truly take the shine of the year or two savings you have made earlier. All about planning ahead.CHeers
Derek, GST changes would be an ultra pain in the ass. Shops having to change all their shelf prices every month etc. Not to mention WA already gets shafted, we dont want to be shafted further.
v, good point.
Hi Paulie,
Know what you're saying – my contention is that the big four have now made redundant any RBA decisions. Decisions which are used to manage the economy for the benefit of all. I might add interest rates don't impact on 30% of the populatin who own their home outright and their is a lagged effect on rents (another 30% of the population) so, in effect, interest rates only have an immediate impact on 30% of the population. Clearly there is some psychological impact even on those without home mortgages.
Not saying it is easy, palatable etc but sometimes I wonder if GST manipulation would be a better economic lever.
Of course this then brings into question farienss of distribution, trust, management of variations at the till etc but I think it could be done.
Whether it will is an entirely different matter.
The cash rate affects everyone mate. It affects credit card interest, avings interest and mortgage interest. If not directly, then indirectly. If your bosses business credit interest increased, he may not be able to afford extra staff or pay overtime.
Everyone is affected by interest rates.
At the time of replying, all major lenders have increased rates. I am now pursuing other lending options as well as fixed rates.
Paullie wrote:Interesting, so they are anticipating rate rises.A sign of increased cost of funding and likely not related to any view about which way the cash rate will go.
http://www.alankohler.com.au/graphs/wholesale-bank-funding-costs
What a joke, CBA posts record profit.
Derek wrote:in effect, interest rates only have an immediate impact on 30% of the population. Clearly there is some psychological impact even on those without home mortgages.Not saying it is easy, palatable etc but sometimes I wonder if GST manipulation would be a better economic lever.
Of course this then brings into question farienss of distribution, trust, management of variations at the till etc but I think it could be done.
Whether it will is an entirely different matter.
Always been a grip of mine too……interest rate manipulation whether by lenders (and they all do this…..including credit unions and the Bendigo Bank!!) or the reserve bank does effect primarily only those with mortgage/s. A dual income renting couple could not care less, or most renters. THe best way to effect spending either way would be better served by actually increasing income tax (or GST as you mention) but can you imagine the noise if that was changed……seems to be less pushback from increase of interest rates only……..and by the time they are raised (or lowered) enough to effect things the damage is done and they have to go back the other way. Oh boy do I remember 2007-2009 so well……
For anyone reading this and considering the ANZ 5.8% fixed rate – just letting you know that the offer expires at the end of this month so get your applications in before this date if you've decided this is the way to go.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Jamie
Where are the details for 5.8% at ANZ?
Jamie M wrote:For anyone reading this and considering the ANZ 5.8% fixed rate – just letting you know that the offer expires at the end of this month so get your applications in before this date if you've decided this is the way to go.Cheers
Jamie
I have just fixed my ANZ loan with the 5.8% rate. You need to be on their "Breakfree package" (cost of about $395 annually) which I was already so didn't cost me anything to do. They did have the house revalued as part of the process which I thought was a bit unnecessary, given I refinance my loan to them about 2 months ago!
thanks bm. Im going to attempt to neg. with CBA.
if the banks lend at lets say variable 6.5% and fixed 6.0% and people choose fixed, and rates go up 0.5 % the bank looses by 1.0% BUT if rates go down the bank wins or the losses are less,
so if rates are going up which i dont think they will why would they banks lock people in so low ? makes no sense unless they know they will be dropping rates soon and if they can lock people in at higher then variable they win……..just my thoughtsFair point, but i suppose its all about timing. Maybe next month fixed rates will be higher than variable because of anticipated rises.
No one has the rates crystal ball unfortunately. It may be worth considering fix part of your loan/s. That way if rates go down, you feel some of the benefit but if they go up it wont hurt too much because part of the loan is fixed.
Paullie wrote:JamieWhere are the details for 5.8% at ANZ?
Hi Paulie
It’s the 2 year fixed rate under their break free package. I wouldn’t fix purely for a low rate – there’s other factors to consider. But if you have decided that fixed is for you, it’s a pretty sharp rate (at the moment).
No harm in asking your current lender to match. Ask them soon though because the promo ends next week.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
"THREE of Australia's big four banks have had their prized AA credit ratings downgraded by one notch because of their partial reliance on wholesale funding markets."
Sounds like another goos excuse to raise rates independantly of the RBA.
CBA rang me and offered me 5.99% for 2 years.
Stick to variable for now !
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