Stuart Said –
“We did a study – no fixed rate borrower has been better off in the last 10 years (compared 3 and 5 year rates to variable over the last 10 years). The longer the terms the more the fixed rate borrower ended up paying. “
I can understand that but in that time interest rates have tended downwards. My first loan 8 yrs ago was around 8%. I expect the trend over the next 5-10 yrs will be upwards. So it may be worth it.
Your thoughts?
You can always expract extra equity out by borrowing more money by having an extra loan. Thats what I have always done with CBA.
It’s hard to say.
The interest rate environment and government money market management policies have changed since the late 80’s and early 90’s. I beleive the government (RBA) is better at managing the interest rate market.
I’m not sure why you assume we’ll be in an upward trend. Nothing suggests we are going anywhere at the moment. But who knows? I think you can over-think interest rates. A very knowledgeable and high profile economist once told me to forget forecasting exchange rates and interest rates – no one knows.
Cheers
Stu
<<<<I think you can over-think interest rates. A very knowledgeable and high profile economist once told me to forget forecasting exchange rates and interest rates – no one knows. >>>>
Good points – its just that interest is my largest expense and forecasting interest rates helps in deciding whether to invest further now or later.
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