Good Morning!
Just when you thought that life could get any crazier, the little guys had a bit of win in the last week with the whole Game Stock thing going nuts. I admit that I have zero idea about the stock market and that to me it seems either like dark magic or a version of the casino that I understand even less. I also admit that I felt a small feeling of joy knowing that the sharks who patrol those waters got caught unawares and got knocked down a peg or two.
Housing prices have dominated the news in the last few weeks showing that Canberra in particular has shown the greatest growth in the nation, this won’t come as a surprise for Canberrans though. What this is all leading to, is possibly another correction that we haven’t yet concidered, till this last week at least. Which is the possibility of the RBA pulling on the reins and raising the cash rate, in order to try and put a stopper on things. Which leads into my next rhetorical question is it time to fix?
When discussing with clients over the last several weeks their own questions around this, I have pointed out the same things to them.
We have the lowest rates in history
Its highly unlikely that the RBA will go any lower
Sub 2% is probably the lowest it is going to go
IF the RBA went to zero or negative banks will shut up shop
I am always reticent to advise a client to do anything other than be able to make an educated decision.
If you want to be able to pay down the loan and still have the advantage of a super low rate. There is another alternative… split the loan, part fixed part variable and have the best of both worlds!
The issues with fixing rates are numerous as we all know. With locked in timelines, limited abilities to make additional repayments, rate could always go down too. The biggest kicker is that fixed rates are quite inflexible to change, especially if you want/need to break the term then it can also be CRAZY expensive.
At the end of the day life is all about creating options and being able to make choices. The reason we work hard is so that we can have those options. Part of what I do for clients is help them to create these options for themselves by giving them the information they need to make their own choices.
Have a great week out there, yell out if you need anything
JC
Scenarios and rates quoted are indications only and don't take into account your personal situation.
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