Chris Bates
speaker
1,659 appearances
5 recordings
1 series
first heard Jun 2021
last heard Dec 2022
Chris Bates’s voice in public audio — every appearance, attributed to the second.
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Appearances
But at some point in your personal situation, a rise in rates may be really confronting.
You might not have enough buffer or you might be going to one income with a family.
And so you might be like, I want certainty on my mortgage.
And so going for a fixed rate might just give you that sleep at night factor.
If the RBA does not with the interest rates, you don't have to worry about.
The thing with variable versus fixed, it's not one or the other.
Generally, it should always be both.
And I get frustrated sometimes when I get clients come to me and they say, I went to a broker or I went to a bank and I fixed 100% of my loan.
Because with fixed loans, besides one bank you can do it with for one year, you can't have offset accounts with them.
The big problem is when you go all fixed, if you get extra money through bonus or financial info or inheritance or you save a lot more than you're expecting...
then you can't offset fixed rate mortgages.
You can only offset variable rate mortgages.
So generally with clients who are potentially only fixing maybe 50 or 60% of their loan and keeping 40 or 50% variable.
With fixed rates in Australia, you can't get 30-year fixed rates.
So in the US you can, and they're pretty cheap when you look at them, and a lot of other countries you can as well.
But really, you can't really get more than five years in Australia at a competitive rate.
So, you know, when you're having a 30-year mortgage, all you're committing to is for five years, I'm going to guarantee this rate,
The big thing with fixed rates, which I don't want to ramble on, is just you've got to be always careful that if you lock in a rate and you decide to leave or cancel, sell that property, you might have to close that fixed rate down and there may be a break cost, which can be a lot of money, especially right now because rates are falling a lot and a lot of people are on big fixed rates with big break fees.
Yeah, we've got one at the moment, a client at Suncorp, $600,000 at 3.99, which was actually not a bad rate.
This is 2018, I think it was, or 2017, I think it was.
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