RBA slashes Rates by a full 1%

[4Vman]

Fixed rates are tempting for a short period, especially when you first enter the market or are heavily geared, but long term analysis has proven that you'll be slightly better off $$ wise staying variable.

[MITCHAY]

Originally Posted by 4Vman

Now the Govt is planning to double first home buyers grant from 7K to 14K....


http://www.news.com.au/heraldsun/sto...38-664,00.html

It will go well with my $20k I already have saved. I hopefully will buy next year sometime depending on how things go!

[FTe342]

Originally Posted by 4Vman

Fixed rates are tempting for a short period, especially when you first enter the market or are heavily geared, but long term analysis has proven that you'll be slightly better off $$ wise staying variable.

I've heard that argument before and if you average things out over a long period it can be the case. But it depends when you fix in the rate cycle. I have plenty of clients who love me for fixing them in low 6's 4 yrs or so ago. Try telling me they are not in front!

[FTe342]

Seems ANZ have jumped on the bandwagon and are dropping their fixed rates also. 1 & 2 yrs down to 6.99%pa which is same as CBA for same terms @ 7.14% less their 0.15% quasi discount when in their Pro Pack

[Yellow_Festiva]

Originally Posted by GTP006

10 Reasons for the Global Financial Crisis (in video):
http://www.liquidgeneration.com/Medi...the_Recession/

My goodness.... :togo: : :togo:

[Yellow_Festiva]

Originally Posted by shaynet

I've heard that argument before and if you average things out over a long period it can be the case. But it depends when you fix in the rate cycle. I have plenty of clients who love me for fixing them in low 6's 4 yrs or so ago. Try telling me they are not in front!

I remember fixing some loans around 5 years ago now. Had the option of 6.19% for 3 OR 5 years...

I chose 3 years, then fixed them again for another 3 years when they matured at 7.19%...

Still not too bad.. they have around 18 months to go.

In the end it is just a gamble... I remember after Sep 11 variable was around 5.2%... now that is low! Wonder if it will go that low again in the next few years???

[4Vman]

Originally Posted by shaynet

I've heard that argument before and if you average things out over a long period it can be the case. But it depends when you fix in the rate cycle. I have plenty of clients who love me for fixing them in low 6's 4 yrs or so ago. Try telling me they are not in front!

For sure, there's no doubt that if you mix and match short term you "can" get ahead, but there's a certain element of luck associated with that, averaged out over a 25 year period maybe different story.....

[snappy]

Originally Posted by Yellow_Festiva

Thats right. You can put away a max of $5000 a year for 3 years, and the Gov' will throw in $8?? for each $5K per year.

The return on your account is around 17%, which is great. However it is strictly a first home buyers deposit account. You pull the cash out and use it for anything else and any extra cash you had received is handed back.

Can anyone tell me who to contact so i can setup one of these accounts.
Ive been saving for the last 7 years . So shattered only heard of this now

An also apparently when the first time they offered 7 grand to first home buyers propety went up by an average of 33k because of demand

[FTe342]

Originally Posted by 4Vman

For sure, there's no doubt that if you mix and match short term you "can" get ahead, but there's a certain element of luck associated with that, averaged out over a 25 year period maybe different story.....

If you don't work in the industry it may be luck BUT when you do (work in the industry) and follow rates all the time its a skill that comes from experience.

Again not advocating fixed rates are the be all and end all. Talk to a broker who is an old time banker before fixing and consider whether there is any chance you will be repaying the loan before the fixed term expires as it can be expensive to exit if rates have moved against you (downward between the time you fixed and the time you are repaying)

Not trying to drum up business here. I have had a gutfull of the finance industry and am heading to Qld to take up truck driving in 2 weeks

[Yellow_Festiva]

Originally Posted by snappy84

Can anyone tell me who to contact so i can setup one of these accounts.
Ive been saving for the last 7 years . So shattered only heard of this now

An also apparently when the first time they offered 7 grand to first home buyers propety went up by an average of 33k because of demand

From what I hear on the radio you just go to any of the main banks and say you want to open the account.

http://www.savingsaccounts.com.au/ne...saver-account/

The 'terms and conditions' are a lot more stringent then I first thought. Not too happy with the fact that the account has to be used only after 4 years...

In 4 years, the extra $ you got from the government would be lost if the house prices went up 30% in the same 4 years...

[snappy]

Thank you yellow festiva.

i love this forum

[FTe342]

Be aware that you have to be saving in these special accounts for 4 yrs before you can access the account funds for house purchase BUT the just announced FHOG increase to $14000/$21000 is only till end of 2009

[SB076]

Bank of England cut rates by 1.5% today (last night) A lot of commentary in the press stating that the RBA needs to further cut rates. Home sales are down and the number of unsold houses is increasing as property values drop.

[Black F6]

Originally Posted by shaynet

Be aware that you have to be saving in these special accounts for 4 yrs before you can access the account funds for house purchase BUT the just announced FHOG increase to $14000/$21000 is only till end of 2009

30th June 09 for FHOG

[BENT_8]

Originally Posted by BENT_8

As for the housing shortage, i'd suggest an era of government owned 'owner buyer' schemes as was offered here in SA during the 60's 70's whereby new immigrants were offered low payment loans to get out of hostels and into their own homes.
Our local government off loaded most of our government housing in the last 15yrs and in a lot of cases to people who needed little more than 1K in the bank for 3mths to get the loan with the government 1st owners grant to cover the legals.
There is now a plan in progress to put up multi floored units all over Adelaides north to house those after this all settles aswell as employ a large portion of the then out of work building trade, also a trait of the 60's 70's although that was more a product to aid the migration boom of 10 pound poms.

Time will tell.

News release in SA today about affordable housing for first home owners.

Apparently the trial is being held by the Salisbury council where they plan to build 12 new homes on council owned land for first home owners. the new owners then only pay a mortgage for the dwelling (~160K+FHOG)and the land remains council.
When and if the owner sells, the council gets paid back the land value including capital gains from the sale.

[balthazarr]

Originally Posted by BENT_8

News release in SA today about affordable housing for first home owners.

Apparently the trial is being held by the Salisbury council where they plan to build 12 new homes on council owned land for first home owners. the new owners then only pay a mortgage for the dwelling (~160K+FHOG)and the land remains council.
When and if the owner sells, the council gets paid back the land value including capital gains from the sale.

This is bad, bad, BAD. $160k, and the council keeps the land? :
I used to work for the contractor that serviced the Victorian Director of Housing loans... so I know first hand what it's like for people that cannot afford a mortgage, should never have been given a mortgage, and are trapped in ridiculous schemes that attempt to make the unattainable attainable. (Such as the 'Share Home Ownership Scheme' - where the "owner" buys part of the property, with a loan from DOH, and then rents the remainder from DOH - all the while being responsible for 100% of outgoings and maintenance.)

It may be harsh, but some people will never be able to afford their own home.

[gcg2503]

Originally Posted by SB076

Bank of England cut rates by 1.5% today (last night) A lot of commentary in the press stating that the RBA needs to further cut rates. Home sales are down and the number of unsold houses is increasing as property values drop.

Mate there are people here on tracker rate mortgages (which track the BOE base rate) and are saving around £600pm based on this rate cut

A lot of ppl who fixed their loans are shattered.......

[4Vman]

Originally Posted by gcg2503

Mate there are people here on tracker rate mortgages (which track the BOE base rate) and are saving around £600pm based on this rate cut

A lot of ppl who fixed their loans are shattered.......

There was an segment on ACA the other night about people complaining about the costs of getting out of fixed rate loans... and they were making the banks out to be the bad guys for charging the owed fee's to release them.. : What do people want? you take a risk and wear the results.. Would people be happy if the bank called in their money if the interest rates went the other way??? You cant have it both ways....

[gcg2503]

ah Norm, never underestimate the stupidity of your fellow man

People will always complain, no matter what....

[4Vman]

Originally Posted by gcg2503

ah Norm, never underestimate the stupidity of your fellow man

People will always complain, no matter what....

Very ture!!!

[AUsome]

Originally Posted by gcg2503

...People will always complain, no matter what....

Amen!

[Yellow_Festiva]

Originally Posted by 4Vman

There was an segment on ACA the other night about people complaining about the costs of getting out of fixed rate loans... and they were making the banks out to be the bad guys for charging the owed fee's to release them.. : What do people want? you take a risk and wear the results.. Would people be happy if the bank called in their money if the interest rates went the other way??? You cant have it both ways....

Exactly.... sometimes the customer comes out better off, sometimes the bank wins.

[4Vman]

Originally Posted by Yellow_Festiva

Exactly.... sometimes the customer comes out better off, sometimes the bank wins.

Yep, the bank's need to have some on either side of the equation to balance the risk.. otherwise they wouldnt be able to offer fixed rates in the first place.

[balthazarr]

Originally Posted by Yellow_Festiva

Exactly.... sometimes the customer comes out better off, sometimes the bank wins.

Banks are like casinos; the house always wins.

If they don't get you on fixed break costs, they'll get you elsewhere.

Maybe I'm just too cynical.

[4Vman]

Originally Posted by balthazarr

Banks are like casinos; the house always wins.

If they don't get you on fixed break costs, they'll get you elsewhere.

Maybe I'm just too cynical.

No not cynical at all, you've just described a healthy buisness that has a strategy to make money and stay bouyant. If the banks go broke .. well you've seen the results of that in the US and GMAC on Holden dealers.
Like it or not we need our banks to remain competitive and profitable.

[Yellow_Festiva]

Originally Posted by balthazarr

Banks are like casinos; the house always wins.

If they don't get you on fixed break costs, they'll get you elsewhere.

Maybe I'm just too cynical.

LOL notice how I used 'better off' instead of 'win' when referring to the customer??

[balthazarr]

Originally Posted by 4Vman

No not cynical at all, you've just described a healthy buisness that has a strategy to make money and stay bouyant. If the banks go broke .. well you've seen the results of that in the US and GMAC on Holden dealers.
Like it or not we need our banks to remain competitive and profitable.

Very true.

A friend of mine recently (1 year ago) purchased a house, and opted for a loan fixed for 5 years.

At the time, I advised not to fix for such a lengthy period for two reasons:

1. Five years is a long time. Rates could go up, they could go down. Her personal circumstances were such that she may not be in a position to keep the place for 5 years. I didn't think that the rate they fixed at was particularly good... especially as there were signs pointing to the current financial mess.

2. The break costs for ending such a lengthy fixed term could be (and are) enormous. At last count, she was up for $18,000+ in break costs - and that was before the latest drop in rates.

My advice to anyone looking to fix their loan - go for a split variable/fixed. That way, you're hedging your bets and, if you do happen to come into a bit of cash, you can pay off the variable portion, without the exorbitant cost of breaking a fixed rate term.

[4Vman]

Originally Posted by balthazarr

Very true.

A friend of mine recently (1 year ago) purchased a house, and opted for a loan fixed for 5 years.

At the time, I advised not to fix for such a lengthy period for two reasons:

1. Five years is a long time. Rates could go up, they could go down. Her personal circumstances were such that she may not be in a position to keep the place for 5 years. I didn't think that the rate they fixed at was particularly good... especially as there were signs pointing to the current financial mess.

2. The break costs for ending such a lengthy fixed term could be (and are) enormous. At last count, she was up for $18,000+ in break costs - and that was before the latest drop in rates.

My advice to anyone looking to fix their loan - go for a split variable/fixed. That way, you're hedging your bets and, if you do happen to come into a bit of cash, you can pay off the variable portion, without the exorbitant cost of breaking a fixed rate term.

Spot on.

[vanman_75]

lifes a gamble,but most people cant except a loss.i had this discussion with a family member last night .he has two friends 1 locked in and loosing ,1 on variable and winning .this could easily be the opposite way around . but he doesnt quite get it and says the locked in is silly ,i gave up trying to explain. rates are looking good now, bet the banks wont let you lock in on them rates

[benoxr]

by 4VMan
Like it or not we need our banks to remain competitive and profitable.

Whilst I agree with that, does it really have to be at my expense?
For example, we have had 3 reductions in interest rates recently.
.5%, 1.0% and .75%
As a result of those first 2 drops, my Credit Union in its wisdom has reduced my mortgage rate a total of .25% and then on 1st Dec will drop it another .63%.
I want them to stay viable too but I dont want to have to pay for that viability out of my own pocket. In the end, if they can't be competitive I'll jump ship and bad luck if they went under..