Interest rate update - fixed or variable for me ?
Recently few of my clients called to ask what will the interest movement for the next few months – shall I rate lock to a good 2 yrs fixed at 6.89% or stay variable? Just in case if the economy turns bad, and rate did adjust downwards, then I can save some money.
Senior Finance Manager from Capital Wealth Finance takes this opportunity to discuss these topics – In Jan 2011our house price did drop by 1.6%, whether our government will reduce the rate is not solely determine by this factor. The other factor to consider is the dirty work – inflation. As oil price rises, the recent flood and natural disaster have all caused the food price to increase, this gives pressure to inflation – same amount of money but can buy fewer goods and services. The government cannot let this inflation figure goes wide, else we will be liked USA –house loan, credit card and bills have no one pay, and eventually caused the banking system to shut down. Hence CPI increases too much – inflation is high, the government will use its entire mean to reduce this pressure. The most effective mean is by monetary policy –i.e. adjusting the cash rate and hence increases the interest rate. Hence there is a high chance in the next 3 to 5 months, Reserve will increase the rate by another 25 points making our variable rate reaches the 8% mark.
If you are an investor with more than 3 properties and have a large loan, please consider partial fixed some of the loan. Our 2 yrs fixed starts as low as 6.89%, by doing this you reduce the risk by half shall rate did increase as our prediction. Though hone owners prefer the variable rate product as it offers the flexibility to repay more and redraw freely which the fixed rate product does not offer. However as household budget is tight, if you cannot withstand another rate hike and it will affect your daily budget commitments, then please consider partial fixed your rate too. By doing it, you will reduce your risk and your next 2 to 3 years budget is no longer affected by rate increases.
Capital Wealth Finance will structure the right loan products so you can own your house faster, create the wealth you need for your retirements. We have different loan products to meet your needs and objectives. Our best selling 2 yrs fixed rate loan product is 6.89% - full doc only. While the self employed and low doc clients can enjoy our premier rate of 7.04%, Jenny Oh will turn your dreams into reality.
Senior Finance Manager from Capital Wealth Finance takes this opportunity to discuss these topics – In Jan 2011our house price did drop by 1.6%, whether our government will reduce the rate is not solely determine by this factor. The other factor to consider is the dirty work – inflation. As oil price rises, the recent flood and natural disaster have all caused the food price to increase, this gives pressure to inflation – same amount of money but can buy fewer goods and services. The government cannot let this inflation figure goes wide, else we will be liked USA –house loan, credit card and bills have no one pay, and eventually caused the banking system to shut down. Hence CPI increases too much – inflation is high, the government will use its entire mean to reduce this pressure. The most effective mean is by monetary policy –i.e. adjusting the cash rate and hence increases the interest rate. Hence there is a high chance in the next 3 to 5 months, Reserve will increase the rate by another 25 points making our variable rate reaches the 8% mark.
If you are an investor with more than 3 properties and have a large loan, please consider partial fixed some of the loan. Our 2 yrs fixed starts as low as 6.89%, by doing this you reduce the risk by half shall rate did increase as our prediction. Though hone owners prefer the variable rate product as it offers the flexibility to repay more and redraw freely which the fixed rate product does not offer. However as household budget is tight, if you cannot withstand another rate hike and it will affect your daily budget commitments, then please consider partial fixed your rate too. By doing it, you will reduce your risk and your next 2 to 3 years budget is no longer affected by rate increases.
Capital Wealth Finance will structure the right loan products so you can own your house faster, create the wealth you need for your retirements. We have different loan products to meet your needs and objectives. Our best selling 2 yrs fixed rate loan product is 6.89% - full doc only. While the self employed and low doc clients can enjoy our premier rate of 7.04%, Jenny Oh will turn your dreams into reality.
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