Hello
This is my first time on this site. I wondered if you could help me with a question.
What happens if interest rates rise…how do you guard against this…do I fix rates? or factor it in my calculations?
Nicole
Hello Nicole,
As a general rule, never borrow to the point that a raise in interest rates, can severely affect your repayment ability. Always factor in a buffer zone.
David Femia
Femia Property Group
Property Investment Consultants
http://www.femiapropertygroup.com.au[Thanks
If for instance the interest rate were 6.5%, should I factor in an interest rate of 7.5& to allow for an adequate margin?
An does everyone generally fix the loans?
Nicole
Fixed a property at five years interest only loan at 5.99% about only three weeks ago. Noticed that five year fixed rates had risen 0.2% to 6.19% when I was in the bank on Tuesday.
While rates may continue to stay low, I think locking in isn’t a bad idea at the moment as I don’t see them going much below 6%.
its anyones guess. depends on your situation.dammed if you do, dammed if you dont sort of thing.
All I can say is that over the last 10 years I’m told that varaible rates on average did better than fixed.
The topic ‘What if interest rates rise’ is closed to new replies.
