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Variable or Fixed mortgage on PPOR?

Discussion in 'Real Estate' started by Brendan, 20th Feb, 2008.

  1. Brendan

    Brendan Member

    Joined:
    10th Feb, 2008
    Posts:
    19
    Location:
    Melbourne / London
    Guys,

    Would like to hear your opinions on the most suitable type of mortgage to get us through this rate rise period, currently on a P&I variable mortgage of 8.11% on a property I am not living in as I am over overseas, it is being rented however at less than the repayments.

    We intend on moving back into the property in about 10 months time

    Do you think its time to lock in to a fixed rate IO mortgage for 2-3 years to get through this rate rise period that is predicted to go up another couple % - or do you think I should ride the wave, hope the Australian market crashes like the UK and US and rates start to come down again..?

    We can probably sustain payments for another few .25 rises but would obviously prefer not to :)

    Your opinions would be great!
     
  2. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Brendan,

    My PPOR loan is variable and I won't fix it.
    I personally think rates will stay where they are or will come down later this year.

    Cheers
     
  3. Bundy

    Bundy Active Member

    Joined:
    21st Aug, 2005
    Posts:
    43
    Location:
    Mermaid Beach
    Hi Brendan,

    I have been to two seminars in the past 2 days with the chief economists for Westpac and NAB both indicating that there will definitely be a .25% rise in March and a further one in May/June. The Govt wants to reduce inflation and reduce consumer spending as quickly as possible.

    In saying this though, they also indicated that inflationary pressures should then begin to ease towards the end of the year and they expect rates to start reducing in 2009.

    Hope this helps

    Bundy