Interest Rates/Aust economy discussion

[mighty_tiger_79]

http://www.adelaidenow.com.au/business/ ... 5946650021

[Psyber]

I bought using the FHOG, but I factored in 5 interest rate rises in 2010 and could probably afford to keep repaying my debt even if rates got to 15%.
Imagine being in Sydney/Melb, where some FHB's have loans of 500-600k.

Very sound planning, DA.
I was paying 8.5% in the late 1960s, 10-12% in the mid 1970s and 14% plus in the late 1980s, and rates under 7% have been uncommon in my experience.

[LMA]

CBA have lifted their rates by .45% effective from this friday

[Psyber]

Yes the details are here: http://au.finance.yahoo.com/news/Austra ... 73663.html

CBA will lift rates on its variable home loan accounts to 7.81 per cent from November 5.

[mighty_tiger_79]

but the cba give you a months warning before the increase takes hold i believe

[Sojourner]

Nice Christmas present for the retail industry...

Considering the actions of the CBA, then I do hope that Joe Hockey gets some action taken over it, if these organisations expect taxpayer money to prop them up in the GFC whilst they roll on the bonuses then it needs to cut back our way as well.

[Sturtman]

I bought using the FHOG, but I factored in 5 interest rate rises in 2010 and could probably afford to keep repaying my debt even if rates got to 15%.
Imagine being in Sydney/Melb, where some FHB's have loans of 500-600k.

Very sound planning, DA.
I was paying 8.5% in the late 1960s, 10-12% in the mid 1970s and 14% plus in the late 1980s, and rates under 7% have been uncommon in my experience.

Yeah but in the 60's, 70's and even early 80's the average price house was about twice the average income. These days its about 7 or 8 times the average which makes it a lot tougher when rates go up. Although i agree when people take out mortgages they should factor in rate rises, so should the banks when deciding if the people can service the loan.

[Psyber]

I bought using the FHOG, but I factored in 5 interest rate rises in 2010 and could probably afford to keep repaying my debt even if rates got to 15%.
Imagine being in Sydney/Melb, where some FHB's have loans of 500-600k.

Very sound planning, DA.
I was paying 8.5% in the late 1960s, 10-12% in the mid 1970s and 14% plus in the late 1980s, and rates under 7% have been uncommon in my experience.

Yeah but in the 60's, 70's and even early 80's the average price house was about twice the average income. These days its about 7 or 8 times the average which makes it a lot tougher when rates go up. Although i agree when people take out mortgages they should factor in rate rises, so should the banks when deciding if the people can service the loan.

In 1956 my parents' 2 bedroom house at West Croydon cost 5200 pounds, plus the cost of moving the laundry into a back lobby and enclosing it to make a third bedroom for me.
My fathers salary was 985 pounds a year.
That is 5.2 times his income which was an average income at the time for a 2 bedroom house.

The only difference now is that houses on that parity of about 5x average income are further out of the CBD, and/or smaller than people aspire to these days.
I've looked at the figures recently while researching property investment options.
[I've decided to wait as I think there will be a slump soon, though not as massive as some people predict/hope.]

[GWW]

Has anyone given any thought about switching to another home loan lender with the apparent increase in competition shown by some of the offers made by the big banks.

I'm giving some thought to changing to the Commonwealth, although I'll do some investigation to see if there's some type of "catch".

http://www.adelaidenow.com.au/ipad/cba- ... 6012279540

[Psyber]

You should always be prepared to check out other deals and explore switching, often your usual bank will then match those to keep your business.
They are concerned about market share, which is why Bank SA just offered 5.6% interest on a savings account and the ANZ have just trumped it witha 6% "Progress Saver" deal.

Over the years, I've dealt with the old Bank of Adelaide, the Cooperative Building Society [who became the new Bank of Adelaide later], BankSA and, in Victoria, St George, ANZ, Commonwealth, and HSBC.
The Commonwealth gave me a good Merchant Services deal through a group scheme but were otherwise a bit rigid to deal with.
Currently the ANZ is my main bank but I do have minor dealings with Bank SA for a fee free VISA deal - another group scheme.
I retain an HSBC account only in case I need to open an account with them in the UK later - they are also rigid and a bit of a pain to deal with.

I miss the old Bank of Adelaide where family connections made life easy, although some of this has carried over to the ANZ who bought them out in 1976.
Occasionally, I need to remind the ANZ I could transfer my business elsewhere to ensure they continue my concessional deals on interest rates and fees. [I don't pay bank fees!]
In about1990 I did negotiate a deal with Citibank when the ANZ were being tight, but then when I told them I was about to transfer my business they suddenly rediscovered flexibility.

[GWW]

I was all set to ring the Commonwealth Bank but now i've been advised that I would have to discharge my mortgage and there are fees involved in this with stamp duty etc. With the relatively small amount that i owe, may not be worth it.

Still, i may ring my bank and see if i can put some type of pressure on them to remove the monthly fees.

[Booney]

I am about to pay a home lona off early and am currently negotiating the early exit fee with my local branch manager. Will be interesting to see what unfolds.

[Psyber]

I am about to pay a home loan off early and am currently negotiating the early exit fee with my local branch manager. Will be interesting to see what unfolds.

I've had many mortgages on a number of homes and business properties between 1967 and discharging my last one in early 2009, but I've never paid an exit fee.
The loans, mostly with the ANZ, have always had the option to pay them off early as a standard part of the deal.
Do some banks do this routinely or is it as part of special deals for lower or fixed interest rates?

[ I recall Bank SA used to impose early termination fees with car leases, so I only ever used their quotes to bargain Esanda, or another competitor, down.]

[Booney]

I am about to pay a home loan off early and am currently negotiating the early exit fee with my local branch manager. Will be interesting to see what unfolds.

I've had many mortgages on a number of homes and business properties between 1967 and discharging my last one in early 2009, but I've never paid an exit fee.
The loans, mostly with the ANZ, have always had the option to pay them off early as a standard part of the deal.
Do some banks do this routinely or is it as part of special deals for lower or fixed interest rates?
[ I recall Bank SA used to impose early termination fees with car leases, so I only ever used their quotes to bargain Esanda, or another competitor, down.]

I believe it is an almost standard practice to charge an early exit fee. If we look to be having to pay an early exit fee we will pay off all but perhaps $500.

[Psyber]

I believe it is an almost standard practice to charge an early exit fee. If we look to be having to pay an early exit fee we will pay off all but perhaps $500.

Perhaps it is the family connections at work?
I'd assumed the option for early payout was standard at the ANZ.

I've always dealt with people who knew my sister, and my brother-in-law who was a senior ANZ executive, and I've always been offered loans without exit fees, and usually at least a 0.7% interest rate reduction.
[Once I even had the money in my account before I'd signed the loan papers but that was only $45K I needed urgently for a deal.]
Occasionally, a new local manager would get rigid about the rules, but a phone call to head office or the suggestion of going to another bank would fix it.

[Dutchy]

I was all set to ring the Commonwealth Bank but now i've been advised that I would have to discharge my mortgage and there are fees involved in this with stamp duty etc. With the relatively small amount that i owe, may not be worth it.

Still, i may ring my bank and see if i can put some type of pressure on them to remove the monthly fees.

There isnt any stamp duty on mortgages anymore, this finished up in 2009. As far as government fees go all you would be up for is around $200 in discharge/register mortgage fees.

[mighty_tiger_79]

interest rates on hold as expected.

[mighty_tiger_79]

bump

interest rates down to 2.25%

[Q.]

bump

interest rates down to 2.25%

bah

might as well not even have term deposits now

[Booney]

3% on $10,000 over 12 months. Why bother?