Another 100 basis point drop?

[mals69]

I don't know why people have this obsession with how much the prices will drop by.

People qoute numbers like drops of 30% for the housing market, thats great but whats more important is how long would it stay subdued for, or elevated for that matter. For a long term investor the short term cycles should not mean that much.

Same goes for our obsession with interest rates, people are out there paying thousands of dollars to break out of a rate, in some cases you would need the rate to drop by 2% before making a profit, when taking into account the waiting on floating rates.

If rates drop to an all time low for a couple of years of a 30 year mortgage great but its nothing to crack open the champagne for or to lose any sleep over.

People make a big deal with it meaning they have more cash flow to live on.

If you were lead up the garden path by a bank manager and told to fix at 9.4 % it maybe a good idea to break now and float or if you are the conservative type fix for 5 years at 7.4% (current Westpac rate)

What I feel is often over-looked is if you have two years to go at say 9.4% and you wait for it to run its term there are obviously no guarantees the rates will be lower than your already high 9.4% rate. This security of knowing where you stand for next five years has to be worth something.

First real estate book I rad by Dolph Deroo's stated if you can secure finance at 10% or less to fix it, as its could value for money and security.
This late 80's advice to me is now outdated with the large purchase prices these days. (with the huge difference just one single percent makes)

mortgage broker, could the real; "rub" be if your clients break mortgages you have to give some commission money back to the issuing bank ? (just going on what I seen posted in another topic re brokers and breaking loans)

[mortgage broker]

No its not that, if the clients stay with the same lender after they break I don't lose anything.

Its just that people get so caught up in talking about the future, as if talking will reveal something.

The future is not for us to see.

[tpr2]

Try a 4 million mortgage MB, 2% difference makes a heck of a lot of difference to the cashflow.
Not everybody has little mortgages.