All Topics / Finance / fixed 3 yr rates and variable rates

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  • Profile photo of steve3556steve3556
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    @steve3556
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    November 18, 2004 - 12:19 pm

    Economics for Beginners

    There have been a few comments lately about the relationship between fixed rates and variable rates and actuaries??

    In the words of an infamous red head “please explain”

    Steve

    Profile photo of PropertyGuruPropertyGuru
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    November 19, 2004 - 12:35 am

    Hi Steve,

    In short lets say you fix your rate for 3 years at 6.5% your interest rate will be 6.5% even if RBA increase the rates.

    But if you get variable rates lets say at 6.45% from XYZ bank and RBA incease the rates to .25% your variable rate will be 6.7%. and if they increase again .25% your rate will be 6.95% but your fixed rate will remain same for 3 years ( if you fixed for 3 years)

    Cheers
    PropertyGuRu [sultan]
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    [email protected]

    NZ loan pre approval from Australia in 48 hours

    Profile photo of steve3556steve3556
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    @steve3556
    Join Date: 2004
    Post Count: 40
    November 19, 2004 - 10:39 am

    Thanks Guru

    That was easier than l thought !!
    I must have been overworking the idea, l was thinking it was something set by the Reserve Bank.

    Steve

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