Interest Rates?

[Psyber]

Managed to refinance my mortgage with a credit union at 5.09% fixed for five years yet the banks are claiming they are doing it tough on 6.40.
Cheers

That's probably based on the credit union's expectation that variable rates will be under 5.09% well inside the 5 years and any relative losses now will be picked up from those now locked in later.

[White Line Fever]

Managed to refinance my mortgage with a credit union at 5.09% fixed for five years yet the banks are claiming they are doing it tough on 6.40.
Cheers

That's probably based on the credit union's expectation that variable rates will be under 5.09% well inside the 5 years and any relative losses now will be picked up from those now locked in later.

What do you think will happen?
I'm on variable 5.9% at the moment

[Stumps]

official rate down by .25 to 3%


of this .25 i think the most that will get passed on is probably .20

the greedy banks have to keep increasing profits

Managed to refinance my mortgage with a credit union at 5.09% fixed for five years yet the banks are claiming they are doing it tough on 6.40.

Cheers

I reckon you have done well fixing at that rate BDP. 5.09 is not very high at all. My variable is currently 5.56 thinking of fixing half at 5.4 just to be safe

[dedja]

official rate down by .25 to 3%


of this .25 i think the most that will get passed on is probably .20

the greedy banks have to keep increasing profits

Managed to refinance my mortgage with a credit union at 5.09% fixed for five years yet the banks are claiming they are doing it tough on 6.40.

Cheers

What's the comparison rate on the 5.09%?

[Psyber]

What do you think will happen?
I'm on variable 5.9% at the moment

I expect rates will continue to trickle downward for a while yet possibly for several years.

[mighty_tiger_79]

the banks make $6million a day they dont pass on the reduction

[Psyber]

the banks make $6million a day they dont pass on the reduction

You still need to look at the profit as a percentage of the capital invested in the business - not as a gross figure.
In any business, if the percentage return is less that fixed deposit interest rates why bother to run a business?
That same applies with investment property where the rental returns need to be better than fixed deposit returns to be worth the hassle/risk.

[mighty_tiger_79]

just went down again

[Psyber]

just went down again

Yeah my Superannuation funds cash investment component income has gone down a bit as rates drop.
The bank shares dividend increases are helping a bit.
But I've gone back to part-time work to maintain my standard of living.

[Leaping Lindner]

"Interest rates will always be lower under a Coalition government than under a Labor government" - John Howard

[smac]

Excellent job of moving on you did there.

[Psyber]

"Interest rates will always be lower under a Coalition government than under a Labor government" - John Howard

Add, "in the same economic circumstances." and it may still prove true.
(Not that I think interest rates this far under the historical economic norms are a good thing.)

[Leaping Lindner]

"Interest rates will always be lower under a Coalition government than under a Labor government" - John Howard

Add, "in the same economic circumstances." and it may still prove true.
(Not that I think interest rates this far under the historical economic norms are a good thing.)

I think it must have been a non-core pledge.

[Browny25]

I've been locked in at 8.2% for the last 5 years, and just come off it!

Ahhhhhh

[smac]

"Interest rates will always be lower under a Coalition government than under a Labor government" - John Howard

Add, "in the same economic circumstances." and it may still prove true.
(Not that I think interest rates this far under the historical economic norms are a good thing.)

I think it must have been a non-core pledge.

Is that anything like changed circumstances?

[Jimmy_041]

"Interest rates will always be lower under a Coalition government than under a Labor government" - John Howard

Add, "in the same economic circumstances." and it may still prove true.
(Not that I think interest rates this far under the historical economic norms are a good thing.)

I think it must have been a non-core pledge.

More like a pyrrhic victory - we proved him wrong but we destroyed the economy to do it.
There is nothing to be proud about having low interest rates at the moment.
If anything, it is showing that our economy is suffering like those overseas

[Trader]

Interest rates are currently at record lows because the current government is so bad it's actually changed the way Australian's spend/save.
Currently, Aussie Households are saving 10%, in 2002 they were saving at -2%.
No one is willing to spend anything due to the current government.

[FlyingHigh]

That's right Trader, you only get a hangover if you stop drinking
What caused the GFC? Too much easy credit and therefore debt.
And Australia under the Howard government was not different. During this period of easy-to-get-credit they slashed capital gains taxes on property and re-introduced the FHOB grant which helped fuel the fire. What a bunch of geniuses . The huge explosion in private debt that people are having to now service puts a pinch on the rest of the economy, which is probably better than the implosions overseas. But no-one cared because people felt they were getting wealthier, when a large part of it was only an illusion.
When the GFC clouds were gathering, the Liberals ran a token election campaign in 2007.
And, yes, I did vote for the Liberals in 96,00 and 04.

[Q.]

Interest rates are currently at record lows because the current government is so bad it's actually changed the way Australian's spend/save.
Currently, Aussie Households are saving 10%, in 2002 they were saving at -2%.
No one is willing to spend anything due to the current government.

False.

Our interest rates are very much affected by the global economy.

The artificially low interest rates in, say, the US and UK, drives investment into the Australian Dollar. This results in our high currency, which slows economic growth. To counter the artificial high dollar, the RBA lowers interest rates.

Interest rates will remain low as long as the Australian Dollar remains high. The Australian Dollar will remain high until the interest rates of countries, like the US and UK, normalise.

[Trader]

Interest rates are currently at record lows because the current government is so bad it's actually changed the way Australian's spend/save.
Currently, Aussie Households are saving 10%, in 2002 they were saving at -2%.
No one is willing to spend anything due to the current government.

False.

Our interest rates are very much affected by the global economy.

The artificially low interest rates in, say, the US and UK, drives investment into the Australian Dollar. This results in our high currency, which slows economic growth. To counter the artificial high dollar, the RBA lowers interest rates.

Interest rates will remain low as long as the Australian Dollar remains high. The Australian Dollar will remain high until the interest rates of countries, like the US and UK, normalise.

Where did I say interest rates weren't impacted by the global economy?

Many things impact on domestic interest rates, and for you to claim that consumer confidence isn't one of them is laughable.