Those with an inflation expectation should want to have a maximum term fixed-rate mortgage, preferably 30 years (the entire duration). An youtuber is discussing it https://www.youtube.com/watch?v=6DZFzbx_Jzo
What's the longest fixed-rate loan you can get in AU?
Just had a look, and Rams is 5.69%.
If you are very sensitive to rate rises, they have a 5yr for 2.29.
Thank you that 5y for 2.29 is very attractive.
1.99% 4 years with CBA I believe.
You will pay quite a premium
That is because everyone expects there to be inflation.
Globalisation means after cost of labour rises in China factories will move to Vietnam, Thailand, India, then Africa.
I expect most economies to end up like Japan. Property & stock market bubble, then zero interest rates and QE, declining fertility rates. We're pretty much there except we keep on importing people to keep the people bubble inflated.
Everyone can be wrong. We’re still waiting for the inflation the GFC response was sure to deliver.
If inflation hits 4% when I am on my death bed there will be people holding gold bars yelling I told you so, but it didn’t get me a pay rise.
Loose money has driven investment asset appreciation, but not so much wages or goods.
I would think any long rate Fixed Term of more than a few years is very bad as it locks you in for that period - little ability to make extra repayments or pay down your loan.
Believe most will allow 10% extra repayments a year. With money this cheap lock it in and invest in the ASX200 index and get some franking credits, you don't have to be an old timer to get on the franking credits bandwagon.
Some have 100% offset now too.
Only lock in 5-10 years if you can guarantee 100% you will not be selling the property within that time else $$$$$$.⁰⁰ in penalties.
Is there a possibility, says 4 years from now, you are still on a fixed rate of 3% but the interest rate for saving is already 5% or more?
Very unlikely. Not impossible of course, since banks' internal models they use aren't 100% accurate.
But doing fixed rate isn't really about "beating" the bank - it's about having certainty.
If only there were something that could be used to hedge against inflation. 🤔
Shorting gme?
Pretty sure whooah is going to mention their religious belief that crypto has a correlation with inflation.
I won’t disagree, except to say TINA (there is no alternative).
Any disruption that Weimar inflates to make gold the answer will bring everything else down too - and you’ll end up holding gold or crypto at the government mandated $32 an ounce.
When everybody has million dollar real estate debt, the gov will make laws to cushion the fall. Gold etc, is useful if you are fleeing a Lebanese civil war or similar.
But I am too conservative in my investments to go all in with debt too!
10 years with some of the big 4.
You will pay quite a premium.