Fixed rate loans

Any general questions you might have in regards to loans and finance.
jasmine
Posts: 46
Joined: Mon Jun 15, 2009 1:45 pm

Fixed rate loans

Postby jasmine » Mon Jun 15, 2009 2:25 pm

Looks like everyone wants to fixed their home loans now.. If i take on a fixed rate home loan, can i make any extra repayments at all????

cjracey
Posts: 52
Joined: Mon Jun 15, 2009 12:13 pm

Re: Fixed rate loans

Postby cjracey » Mon Jun 15, 2009 2:28 pm

I heard on the news that the interest rate has bottomed and the banks are all going to increase their home loan rates. Should I be fixing?

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Otto Dargan
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Re: Fixed rate loans

Postby Otto Dargan » Mon Jun 15, 2009 9:08 pm

You can never tell if it is the best time to fix or not. Economists seem to be changing their mind everyday about this issue and the banks seem to be charging much higher rates for their 3, 5 and 10 year fixed rates then is appropriate considering what rates are expected to do.

For this reason we really can't give you any advice as to if now is a good time to fix. We can only advise you of the cheapest fixed rate loans when you do apply with us.

Most lenders do not allow extra repayments on a fixed rate loan. Some however have flexible fixed rate loans that allow unlimited repayments as long as you don't close the loan account.
Otto Dargan
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alexjong
Posts: 60
Joined: Wed Jun 17, 2009 5:21 pm

Re: Fixed rate loans

Postby alexjong » Wed Jun 17, 2009 5:29 pm

Hi All,

What the pros and cons are of fixing, or even splitting?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Fixed rate loans

Postby Otto Dargan » Thu Jun 18, 2009 8:46 am

Pros:

* You know your repayments.
* Peace of mind.
* Security.
* You will be better off if rates rise.

Cons:

* Loss of flexibility (extra repayments limited).
* High exit fees.
* You will not benefit from rate decreases.
* You cannot refinance easily.
* Often you may end up paying more than with variable.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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