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Rates now lowest in 60 years!

Discussion in 'The Economy' started by Jacque, 3rd Feb, 2009.

  1. Jacque

    Jacque Team InvestEd

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  2. Chris C

    Chris C Well-Known Member

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    Meh... I think the 100 basis point cut is just in line what the economy needed to not tank. These cuts won't overt our recession, they will just help to overt disaster. The economy is still going to slide downhill.

    Also the stimulus package is good, without being great.

    I think there will probably be scope for more than the expect 50 basis cut in March, and there is still a lot more downside potential in the world than upside.

    Also interest rate cuts and stimulus packages are all well and good, but we are a small economy and the rest of the world has a big influence on us - so the actions of the Australian government pail in comparison to the position of the world economy. We will really need the world economy to start recovering before we really see any significant return to growth in our economy.
     
  3. Jacque

    Jacque Team InvestEd

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    I certainly don't disagree with you, Chris. Adding to the budget deficit is just what a govt should be doing in these times, especially if the aim is to increase spending (which it is) and avoid a deeper recession than the one that we will end up having. Ditto the decreasing interest rates.

    With a global world growth forecast of just 0.5% I certainly think there's more pain on the way.
     
  4. AsxBroker

    AsxBroker Well-Known Member

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    Hi Jacque,

    That's impressive now that RBA rates are at 3.25%.
    What's also impressive is St George's new home loan campaign with 1.5% pa off the standard variable rate, which now means about 4.4% pa for the first year and then around the usual 0.7% pa discount.

    How low will it go?

    Cheers,

    Dan

    PS Before making a borrowing decision speak to your registered lender.
     
  5. Jacque

    Jacque Team InvestEd

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    Hi Dan

    I said in a previous post if rates go below 4% for 3-5 yr terms I'm fixing. It makes sense to me when the interest rate payments are less than the rent I'm receiving, that I'd be silly NOT to consider doing it.

    How low can they go? Who knows? Some are predicting another 0.5% off in March. I'm not convinced, but hey we are living in unpredictable times right now. If you'd told me a year ago when I fixed one large loan at 7.95% for 3 yrs that rates would go below 6% I'd have laughed. Not anymore!
    *And, yes, we took the decision to break but now I'm so glad we did. Given the current climate, we'll make our break costs back in less than 12 mths.
     
  6. Jacque

    Jacque Team InvestEd

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    Guessing this is only for honeymooners and the like?
     
  7. dudek

    dudek Well-Known Member

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    I get discount each time I refinance my mortgage with St. George so my guess is you don’t need to be first time customer.
     
  8. Chris C

    Chris C Well-Known Member

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    Might not be a bad idea, especially if inflation starts to look ominious which it probably will in 6 - 12 months time. Though the timing of fixing interest rates will be about as hard as timing the bottom of the stock market, and no doubt the banks will be very wary of wanting to fix for long period when rates are well below their long term average.
     
  9. Billv

    Billv Getting there

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    IMO 5% is good enough for a 5 years term
    and if I find under 6% for 10 or 10 years I'll take it.
     
  10. AsxBroker

    AsxBroker Well-Known Member

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    Last edited by a moderator: 10th Feb, 2009
  11. dudek

    dudek Well-Known Member

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    Does anyone remember interest rates movements around 1991?
    I mean if banks got it low for long term and changed it as soon as situation improved.
     
  12. Billv

    Billv Getting there

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    Dan

    Thanks for the URL's
    I am willing to wait, hopefully by the time variable interest rates bottom there will be some specials

    cheers
     
  13. AsxBroker

    AsxBroker Well-Known Member

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    Sorry, that should have said "AREN'T giving alot away with long term fixed rate loans"...
    I've fixed it now :)

    Cheers,

    Dan