Fixed or Variable Home Loan, What Should I Do?

By Dave Lamari
 
Recently I have had many a question asked on whether it is best to fix or go variable.

Earlier in the year this was a little easier to answer as rates were still relatively low on both fixed and variable.

Recently the variable rates have started moving up of the most recent Reserve Bank decision and their ‘rhetoric’ is definitely along the lines that it will increase even further.
 
Fixed rates on the other hand have actually been moving upward for a few months now and it is safe to say they will continue in line with the trend of the variable.
 
In short this means, similar to what I say to most clients for some time. If you wish to budget and be sure you will know what your repayments are, on a particular loan size, fixing is the only way to be sure.

That is, fix to budget, try not to fix to beat banks at rate rises.

Perhaps a split loan (part fixed and part variable) will give you the combination of the flexibility of a variable and the security of a fixed.

If you have any questions on fixed or variable home loans, please give me a call...  (07) 4723 8077

First Home Owners Grant – Current Status

by Dave Lamari
 
From the 1st of October to the 31st of December the first home owners grant will change to $14000 for a new home and $10500 for an established home.

It is anyone’s guess as to whether these will be extended after this.

The government’s current position on this is that both will simply drop to the original $7000 (i.e. the ‘boost’ will stop). 

If you have any questions please give us a call...  (07) 4723 8077

Interest Rates and The Economy

By Dave Lamari

There are many signs in the economy now pointing towards rates moving a little more aggressively than first thought.

The common belief is that this will be in the order of 1 – 1.5% in the next 12 – 18 months. The fixed rate movements are anyone's guess, but it is safe to say that if the variable rates are higher in 12 months, the short term rate son the fixed side will move accordingly.
 
Movements in variable rates have finally started and there are signs that this will continue at least in the short term (the Reserve Bank Governor is stating this quite clearly, rather than ‘double talking’ around it).
 
Fixed rates – These will follow (or lead) suit with Variable rates. These are not directly looked at by banks in line with Reserve bank moves, but rather moved as banks please and normally align with other banks in the interest on competitiveness.
 
Property and Rent prices – As with 18 months ago, there are signs that what effected rent and property prices back then (interest rate increases, inflation etc) are soon to re-enter the economy. This however does include a positive side. Rates are moving due to signs of a strengthening economy and with that normally comes better public sentiment and jobs growth (and maybe property price growth J).
 
Too Much Stimulus? - http://www.eurekareport.com.au/iis/iis.nsf/lpages/RWIE-7N92AE?opendocument