I have just jumped on betfair and managed to make a bet for a quarter percent rise at 1.85 to 1 odds. I am not 100% sure that there will be a rate rise – but am more than 75%, so my odds are OK IMO. This is because inflation has hit about 2.1% for the year just passed, according to the TD Securities/Melbourne Institute monthly inflation gauge.
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I wish I had a crystal ball, as it is possible that the US could respond to their problems in 2012 by printing money to “inflate” out of trouble. However I believe that the US still has plenty of borrowing power left and will not need to go down this path (The UK and Japan may be another matter). Well – the usual situation is that nobody guesses what will happen . . . I’ve been told there are limits to how much extra I can pay on my fixed rate homeloan, above the minimum repay? What is going on here? With some lenders there is a need to watch what happens very carefully when your fixed rate home loan completes its term. Often the loan will roll over onto the standard variable rate, and this can be much higher than what you can get as a basic variable or negotiated rate. What are break costs and early payment interest adjustment (EPIA) penalties? Break costs are fees that occur when you “break” a fixed rate loan. There is also a cost for paying off part of a fixed loan called and early payment interest adjustment (EPIA). The IMF has increased their expectations of Australian economic growth. I think this will filter through to higher interest rates in the 2 to 4 year term. I think there will be a slowdown in about five years from now, due to the timing of the next US election – so my five year is a bit lower than my four year. I have calculated the following as indicative maximum interest rates to lock in at: . . . (check out the post) Here are some questions to ask yourself if you are considering fixing. . . |
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