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I'm looking at getting some advice around whether i should get a fixed or variable home loan, especially with the decline in real estate of late. Will that effect me?
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Hi Hamish,
Will this be your first home loan or a refinance or second purchase.
The decline in the real estate market will not greatly impact your ability to get a fixed or variable loan.
I do suggest to a lot of my clients these days with the rates where they are that it is always good to have a mixed loan. So have a portion fixed for the comfort of being able to plan your cashflow & repayments for a fixed period of time & then have a portion variable to allow you to make additional payments & redraw, features which are not available on a fixed loan. Also you have the luxury that should the rates go down again your variable portion gets the benefit.
I hope this gives you some guidance. Feel free to contact me should you wish to discuss further.
A fixed rate loan (at this stage in the rate cycle) is to protect yourself from rising interest rates. If you are close to your borrowing capacity or if a rate rise will seriously effect your casflow then yes, I wou
Hi Hamish . The effect of the fluctuations in real estate market really depends on your individual circumstances. For example whether you have an owner occupied property or investment AND how long you intend to keep these. Fixing your home loan has some great benefits however you also need to be aware of the negatives such as being unable to make additional payments etc. sometimes splitting your loan into part fixed and part variable may be the answer. Love to chat if you need more info - Deb
Choosing to fix in my experience is based around your individual financial situation.
If you have the capacity to repay the loan aggressively then fixing may not be the best option due to fixed rate restrictions on principle payments.
If you don't have this ability then you need to ask yourself if rates gradually move back up to 7% can you still manage the repayments. If the answer is no then fixing may be a good idea.
You also have the option to split the loan and keep a portion variable and a portion fixed. This can help hedge your risk.
Your question around fixing to help in a declining property market for me is not directly linked so I think it's neither here nor there. It's managing the loan repayments should the banks lift rates.
I hope this helps you.
Happy to discuss any time.
