Simon DParticipant@sduxiaofJoin Date: 2002Post Count: 5
Noticed the interest rate is creeping up, is it now the time to thinking about fixing the rate?
Currently for investment home loan 4.44% for 2 year (bank of melbourne) is good deal?
Currently I get portfolio loan with bank of Melbourne (advantage package), even I get 1.35% discount, however, my rate is still at 4.75% which I think it is a bit high. However I may have difficulty to refinance to other banks due a few issues (mainly restricted by the income part). Any advice on how to get better deal welcome.JaxonParticipant@jaxonaJoin Date: 2014Post Count: 282
Mate state custodians is 3.7% or 3.8% for IP
in regards to fixing, do what fits your stratergyBennyModerator@bennyJoin Date: 2002Post Count: 1,376
Re the Fixed Rate, be sure that you know just what can impact you if your plans were to change. By this, I mean that if you had any reason to have to “break” that Fixed loan, it would cost you dearly. So, if you are thinking of refinancing soon, or maybe needing to sell, or even have concerns about the security of your job, do think hard about a Fixed Loan. At the very least, before taking it on, check what the cost would be (ballpark) if you needed to break out of it the next month.
The “break costs” of these loans are horrendous. On the one occasion when I had to break, I tried to work out what the Interest costs would be for the time left, and allowed the fees that are tacked on to do it. Even then, I was wrong by a factor of 3 (it cost me 3 times more than I was expecting).
Currently I get portfolio loan with bank of Melbourne (advantage package), even I get 1.35% discount, however, my rate is still at 4.75% which I think it is a bit high.
Only a couple of weeks back, one of our resident gurus warned about Portfolio Loans, and that they shouldn’t be used except in special situations (short term, was it?). I can’t recall the circs – but essentially, they are a Loan that is fully favouring the lender. As such, the rates are not likely to be beneficial to you. Maybe check to see if you can opt out of the Portfolio onto a straight IO loan with them, and check the rates and/or repayments if you were to do that. You may get a pleasant surprise.
BennyJamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
Only you can make the decision regarding whether fixing is the best option for you or not.
If you’re planning on investing further- and if the property with the loan you’re considering fixing is involved in those plans….then it might be best to leave the loan as variable so you maintain a level of flexibility.
If it’s a set and forget property that you’re not planning on releasing equity in/selling, etc and you’ll take comfort in knowing what your monthly repayments will be then fixing might not be a bad idea.
All in all – it’s an individual decision.