Hi just wanted to check if anyone knew about deals on fixed rate with the recent rate reduction please ? Don't know how much time the banks take to pass that on but I'm coming for renewal of my fixed with Bankwest on June 7th and they are offering 3.99% on fixed 3 years with $395 yearly fee and not ready to waive or consider anything. Any advice would be greatly appreciated.
Best deal on fixed rate for mortgage
dealover on 12/05/2016 - 19:55
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The Bankwest offer is not too bad, but you'd probably be able to do better elsewhere depending on your loan size and what features you were looking for. At present, we're offering Bank of Sydney 3yr fixed at 3.88%p.a. (CR 4.28%p.a.) with a $1000 rebate for borrowers over $350k.
The promotion listed here with ING's Orange Advantage 3yr fixed at 3.98%p.a. (CR4.66%p.a.) has similarly been extremely popular.
If you were willing to consider fixing for 2 years a product like Newcastle Permanent's 2 year fixed at 3.74%p.a. (CR n/a) is a very attractive option for a person looking to fix.
With all of these loans they can be combined very cost effectively with a variable loan that offers a 100% offset account that will be in the 3.8x%p.a. range when the rate drop becomes effective in the coming weeks.
Hope this helps.What are people's thoughts on fixing a rate anyhow? From what I understand, it's rarely worth it as the banks specifically plan to make sure not to lose money on it…
I mean, it's good if you're tight on money and need predictability, but in most situations isn't it better to just go variable as you're unlikely to outsmart the banks on this sort of thing?
The banks plan on not losing money by hedging their position when they fix a rate which has nothing to do with the borrower.
If you have a fixed rate and the rates go up it is definitely worth it. If you had not fixed you would be paying more money than had you fixed. Obviously we haven't had a situation like that in a while with interest rates going down for quite some time but its still the same principle.
If you have a fixed rate however and the rates go down and you want to break (pay out) your fixed loan, a bank will charge you 'break costs'. And this is fair enough as the bank has made financial arrangements and budgets based on that income from you. And they would only be able to lend that money out at a lower return.
Conversely if rates increase above your fixed rate a bank is happy to break your loan contract at no cost as they can lend that money for a higher return.
However if you look at the fixed rates a bank offers that gives you some of an idea of how the bank thinks interest rates will go. If the 5 year interest rate is higher than the 3 year interest rate and that in turn is higher than the variable rate, then the market is most likely predicting interest rate rises.
TLDR: If rates are going to go up it is better to fix your loan. If they are going to go down it is not. However as no one can know it is best to look at your own situation and manage accordingly. you aren't going to 'beat the bank' but you might just 'beat the market'.
Even ANZ are offering 3.75% for 2 years, I think we are in store for nmore rate drops.
Whether rate cuts be passed on via fixed rate offers depends on if the banks think rates will continue to fall or rise. If they think its already the bottom they'll actually increase rates not decrease them.
As someone else mentioned, rarely do you come out ahead with fixing
Thanks a lot guys. I'm thinking I should convert to Variable with bankwest which they are giving at 4.02% for my $359K loan so that I can take the better fixed rate or have the option to do that. Not sure if I will still have to pay exit fees etc to move to another bank but I though this was better than fixing and then later crying after a month as the rate announcement to decrease just came in.
how you get 4.02% variable rate ? Bankwest hasnt released their new reduced v rate yet ? :)
I've got it in writing it starts 20th may
I think you need to hold out. There are two more rate cuts predicted, and you better believe they will happen. I reckon you're better off going through someone like uBank.