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Are you fixing your mortgage?


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#1 *JAC*

Posted 07 January 2013 - 07:54 PM

Hi!

Our mortgage is currently under fixed terms, which expires in March.  It will automatically go to Standard Variable.

I'm thinking about fixing it again as the current interest rate is 5.54% - I really can't see the rates reducing that much more in the near future.

Should I fix or leave it standard variable?

Thanks!

#2 KT1978

Posted 07 January 2013 - 08:54 PM

I'd stay on variable and pay off as much extra as I could.

I think rates may still go down but unlikely to go up quickly. Paying extra is better than a fixed rate IMO.

#3 pinkpineapple

Posted 07 January 2013 - 10:26 PM

I considered fixing half of mine but left it all variable. Already gone down twice since Nov lol.

Read some where that it works out the same in the long run and only been a couple times in past ten yrs that fixed was better. As PP said just try to put in extra.

#4 Bluenomi

Posted 08 January 2013 - 09:04 AM

We left ours unfixed when it came off fixed. Since then the interest rate has dropped so much I'm glad we did.

Also the fix rate is usually higher than the variable.

#5 bondgal

Posted 08 January 2013 - 09:10 AM

You could consider hedging your bets and fix some and keep the remainder on variable. That way you can pay extra off the variable if possible, but feel confident that some is locked in at a rate that won't change. I'm not sure of the costs involved in this approach though.

#6 countrymel

Posted 08 January 2013 - 09:13 AM

When we got ours the lady at the bank quietly suggested to leave it on variable... 'for the time being'.

I guess it depends how tight your budget is.  We are paying over the required payments so if things do change dramatically we have some wiggle room.

If things were very tight I'd probably insist we fixed at least part of it so that we weren't caught out by an unexpected jump.

My parents had fixed theirs prior to things going crazy in the 1980s - I can clearly remember Mum having to constantly remind Dad when he would start to freak out when the news would report rates going to 17%, 18% etc. that "Don't worry dear OURS is fixed rate!"

That left an impression on me.

#7 Kalota

Posted 08 January 2013 - 09:18 AM

QUOTE (KT1978 @ 07/01/2013, 09:54 PM) <{POST_SNAPBACK}>
I'd stay on variable and pay off as much extra as I could.

I think rates may still go down but unlikely to go up quickly. Paying extra is better than a fixed rate IMO.


Agree with this original.gif We are on standard variable and not planning on fixing our rate. We are paying off as much extra as we can though. Paying off more than your scheduled repayments is the best way to keep interest down, much more so than fixing your rate.

We are putting every single little extra penny into our mortgage to keep the interest down. We are able to redraw though, so if there is emergency and we need that money we are able to take it out again.

#8 julzely

Posted 08 January 2013 - 09:24 AM

I was told the only reason to fix a homeloan is if can't afford to pay of any extra, otherwise you are better to go variable and just pay off as much as you can.

A good indication of which direction the banks expect interest rate to go in is their fixed interest rate v.s their variable.  If the fixed one is lower then the variable they expect to see reductions, if the fixed is higher then the variable they expect interest rates to go up.



#9 daisydo

Posted 08 January 2013 - 09:28 AM

QUOTE (julzely @ 08/01/2013, 10:24 AM) <{POST_SNAPBACK}>
A good indication of which direction the banks expect interest rate to go in is their fixed interest rate v.s their variable.  If the fixed one is lower then the variable they expect to see reductions, if the fixed is higher then the variable they expect interest rates to go up.

This is what I have been told also.

#10 Silver Girl

Posted 08 January 2013 - 01:36 PM


QUOTE (countrymel @ 08/01/2013, 10:13 AM) <{POST_SNAPBACK}>
My parents had fixed theirs prior to things going crazy in the 1980s - I can clearly remember Mum having to constantly remind Dad when he would start to freak out when the news would report rates going to 17%, 18% etc. that "Don't worry dear OURS is fixed rate!"

That left an impression on me.


Your parents timed that well - it's fantastic it worked in their favour  original.gif

#11 jks91

Posted 08 January 2013 - 04:03 PM

We will be definitely keeping ours variable, we pay close to double the minimum and are on track to have our 30 year loan payed off in 8 years.

DP quite enjoys tracking the additional payments and how far ahead we are in the loan.

#12 countrymel

Posted 08 January 2013 - 04:07 PM

QUOTE (Silver Girl @ 08/01/2013, 02:36 PM) <{POST_SNAPBACK}>
Your parents timed that well - it's fantastic it worked in their favour  original.gif


Yep... that was my Mum, a brilliant financial manager!  Irony being of course that it was Dad who was the accountant!

He could be responsible for billions of dollars of other peoples money (worked in the mining industry) but totally overwhelmed with his own!

#13 PrincessPeach

Posted 08 January 2013 - 04:11 PM

QUOTE (julzely @ 08/01/2013, 09:24 AM) <{POST_SNAPBACK}>
I was told the only reason to fix a homeloan is if can't afford to pay of any extra, otherwise you are better to go variable and just pay off as much as you can.

A good indication of which direction the banks expect interest rate to go in is their fixed interest rate v.s their variable.  If the fixed one is lower then the variable they expect to see reductions, if the fixed is higher then the variable they expect interest rates to go up.


This is what I have found out as well.

We have ours as variable for the main reason we can pay extra off it & reduce the interest charged. If it was fixed, we could still make the extra repayments, but it wouldn't reduce the interest charged, which is not what i want. So at the moment we are throwing DH's wage to it & living off mine. It works well & we should be fully paid off in a few more years - if we don't buy another house in the meantime.

#14 whale-woman

Posted 08 January 2013 - 04:15 PM

QUOTE (julzely @ 08/01/2013, 10:24 AM) <{POST_SNAPBACK}>
I was told the only reason to fix a homeloan is if can't afford to pay of any extra, otherwise you are better to go variable and just pay off as much as you can.


Not necessarily so. We had  a fixed mortgage when we lived overseas. It was the standard way of doing things there and was great. We were lucky and for most of the time had interest rates on deposits higher than the rate we were paying on the mortgage  biggrin.gif  We had actually organised a facility to make extra payments but there was never an incentive to do so.

#15 belinda1976

Posted 08 January 2013 - 04:16 PM

Our fixed rates end on 25th of this month and we are re-fixing it again.  We have 2 home loan one is fixed the other variable.

#16 Onyx

Posted 08 January 2013 - 04:18 PM

We will stay variable for now.

I see rates reducing a little more before staying put for awhile or increasing.

#17 SummerStar

Posted 09 January 2013 - 06:26 AM

QUOTE (Bluenomi @ 08/01/2013, 10:04 AM) <{POST_SNAPBACK}>
We left ours unfixed when it came off fixed. Since then the interest rate has dropped so much I'm glad we did.

Also the fix rate is usually higher than the variable.


I have noticed with our bank, while the rates are going down, the fixed rate is less than the variable. When they are creeping up, it's more.
I am considering fixing ours soon. I want to catch it before they go up.
Partly because we will have a set amount we pay, we will know how much we will be paying for however many years which for us would beneficial. I've kind of been holding out for it to get as low as it can. I'd be ok about it going slightly lower when we fix it.

Edited by SummerStar, 09 January 2013 - 06:26 AM.


#18 may-b-baby

Posted 10 January 2013 - 03:55 PM

I will be leaving mine as Variable.

I went onto a Mortgage Calculator and worked out that I could meet the minnimum repayments at 10% interest rates so figured variable was the way to go.

It might be a good idea to do something similar - if you can afford the repayments if rates go up variable is probably a good option original.gif

Good Luck




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