Great news for most people I guess. (Unless you are retired )
How will this affect what you do?
Will you spend more on your home?
Spend extra on treats for you and your family?
Browse Forums General Discussion 1 Oct 07, 2008 8:27 pm Great news for most people I guess. (Unless you are retired )
How will this affect what you do? Will you spend more on your home? Spend extra on treats for you and your family? Re: 1% rate drop in official interest rates.. 2Oct 07, 2008 8:29 pm The smartest people will keep paying what they have been... the rates will rise again eventually... create the buffer by getting ahead now.
My brother has always payed more... and he now owns outright... no mortgage.... all extra money off the loan... the only way to go in my opinion. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: 1% rate drop in official interest rates.. 3Oct 07, 2008 8:37 pm I agree Jo, we have always paid more so the interest rate rises have not affected us.
This may not be an option for some, I know people who are counting on the rate drop just to make ends meet. Paula Re: 1% rate drop in official interest rates.. 4Oct 07, 2008 8:51 pm We'll be luck to have the 1% reduction in official rates translate to 0.5% off the home loan rate. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: 1% rate drop in official interest rates.. 5Oct 07, 2008 8:54 pm Its not so much what will we spend more on, but how much more can we save. We haven't started our build yet so all our savings will mean what we can afford to do as our fit out. Re: 1% rate drop in official interest rates.. 6Oct 07, 2008 8:56 pm Since I don’t have a home loan, maybe more people will have some extra cash to employ a decorator!!!
Since you all feeling the pinch with your loans, I’m feeling the pinch big time….work wise! Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: 1% rate drop in official interest rates.. 7Oct 07, 2008 9:18 pm I'm lucky to be able to pay cash for the house we're building without a loan.
But in the meantime, we have our previous house sale's proceeds in the bank and therefore I think I'm one of the few people wishing rates would skyrocket! (just kidding, I know how crippling they are - I recall paying 14% at one stage, many moons ago). To answer your question though, the cut will not save me more, it will cost me in potential interest earnings. It will be interesting to see how careful people are if they have a few spare dollars each month in their bank account. Re: 1% rate drop in official interest rates.. 8Oct 07, 2008 9:32 pm Will be interesting to see how much is passed along. I work for Westpac (although been on maternity leave since 2005) and was happy to see them pass on 0.8% - we have one investment property with them but so far haven't heard from NAB - whom we have all our company dealings with. Re: 1% rate drop in official interest rates.. 9Oct 07, 2008 9:36 pm kyton (although been on maternity leave since 2005) Internal and External Building and Colour Consultant Online - Worldwide http://www.denovoconcepts.com Re: 1% rate drop in official interest rates.. 10Oct 07, 2008 9:58 pm Interest cuts or rises don't bother me much. They go up, they go down. Over the long term it balances out.
But the fact that the Reserve Bank felt the need to cut by a full 1% is worrying. It may be OT but a cut that size, in a country that is not yet facing anywhere near the level of credit problems affecting the US and Europe smacks of panic at the highest levels. Or the RB knows something we don't. That's a worry. Taken with the news coming out of Europe in the last day or so it's a sign that this so-called 'credit crisis' could be merely the tip of the iceberg. The world is teetering on the edge of a very serious recession at best here, and at worst something close to the Great Depression of 1929 (although it won't be the same). If we do fall off the edge low interest rates are not going to help anyone. Even zero rates don't help people pay their mortgages if they're unemployed. Re: 1% rate drop in official interest rates.. 11Oct 07, 2008 9:59 pm Michelle - love love love Westpac. They bought in 2yrs maternity leave the month before I was due back to work (Harriet was born July 2005 and I had 12mths off - supposed to return Aug 2006) - they sent me a letter asking whether I would like to increase my leave for another 12mths - yes please!! They didn't know but we were already trying for bub No.2. So with extension was meant to go back in Aug 2007 however Quinn arrived in May 2007 so then I got another 2yrs from that time - so now due back May 2009. Had our home been started earlier this year we would have been trying again for another bub to see if we could get another 2yrs - I really don't want to resign but since I already work 2 days at our business and we refuse to put the kids in daycare I don't want to work another day at Westpac.
So next stop will be to see how far the house is along by April next year then maybe ask them for career break (unpaid leave for up to 2yrs) and try again for another baby. As I said love love love Westpac. In 19yrs of working for them I have only ever hated it for probably 6mths and that was due to the management at the time nothing else. Re: 1% rate drop in official interest rates.. 12Oct 07, 2008 10:03 pm It's crazy. Have dozens of cities been destroyed in a catastrophe ? Millions killed by a plague ? Food crops failed around the world ? No, no and no. Yet suddenly there's a crisis. Just rich bastards caught out while playing "pass the (money) parcel" and its joe-average taxpayers around the world who'll bail them all out. Do the hard jobs first. The easy jobs will take care of themselves. - Dale Carnegie Re: 1% rate drop in official interest rates.. 13Oct 07, 2008 10:19 pm I agree, it's absolutely crazy. As is giving mortgages to people who don't have sufficient income to repay them and calling it good business. In the US they actually enshrined the rights of 'minorities and the disadvantaged' to enjoy the fruits of credit -- the road to hell is paved with good intentions.
But the fact that the regulators around the world were asleep at the wheel as these huge parcels of essentially bad debts were packaged up and sold as blue chip investments around the world (including to Australians) is now irrelevant. The taxpayer cannot 'bail out' what, by all accounts, is something like 11 trillion dollars of bad debt globally. And the end result is that trading banks have now essentially stopped lending money. When that happens the economy disappears down the gurgler. Like it or not, the world cannot continue to increase living standards and provide us all with comfortable incomes if there is suddenly no credit available to commerce and industry. The inevitable result is company failures and staff layoffs. And the building industry will be hit hard. In the last 6 months alone 80 Australian companies in the building industry have filed for bankruptcy. And it hasn't even started to bite here yet. Builders always operate hand to mouth. Even really big builders. Big shake up coming folks. Re: 1% rate drop in official interest rates.. 14Oct 08, 2008 12:44 am Have a look at some of these figures folks.
Mortgage interet rates since 1959 to 2008 = trends do tend to repeat themselves. http://www.rba.gov.au/Statistics/Bulletin/F05hist.xls and level of household debt to assets ratios. http://www.rba.gov.au/Statistics/Bulletin/B21hist.xls All at the RBA.gov.au under statistics. Steve Re: 1% rate drop in official interest rates.. 15Oct 08, 2008 12:51 am and what makes it scary is any money you have in banks at the moment is not protected if the bank goes bust.
Dh even commented today that perhaps w e should just pay the builder but then you'd be stuck if the builder went bust. Fingers crossed it doesn't get to the stage where the banks start to have problems. Re: 1% rate drop in official interest rates.. 16Oct 08, 2008 6:49 am All the major 4 banks announced they pass on 0.8% which very much welcomed relief
This will enable my wife to be a stay at home mum a little bit longer, which we both like Re: 1% rate drop in official interest rates.. 17Oct 08, 2008 7:21 am Ancient Mariner Big shake up coming folks. We agree totally Ancient Mariner.......& we've been saying the exact same thing for the last 6 years ! Unfortunately, the Oz population takes no interest in what goes on o/seas. There were ripples showing long ago. I just cannot believe that so many people think that boom times can go on forever. It is inevitable that the pendulum swings the other way. THere is always a price to pay for over indulgence. And we ( the entire world) have been seriously overindulging for the past few years and it's now time to pay the piper ! Built the Eden Brae Cambridge 34 Family with Boston Corner Facade Re: 1% rate drop in official interest rates.. 18Oct 08, 2008 7:27 am Quote: and what makes it scary is any money you have in banks at the moment is not protected if the bank goes bust. Not really the case. The big 4 banks in oz are govt backed by the reserve bank, so it's pretty safe there. As for some others like b west, yes i'd be moving it. but not to the builder. Steve Re: 1% rate drop in official interest rates.. 19Oct 08, 2008 7:28 am kyton I said love love love Westpac. In 19yrs of working for them I have only ever hated it for probably 6mths and that was due to the management at the time nothing else. Do they have interest rates for employees? The com bank used I remember my DAD saying he was paying 1% interest rate at one stage. Re: 1% rate drop in official interest rates.. 20Oct 08, 2008 7:44 am Ausfatcat - the only discount staff get is the same as anyone from the general public borrowing under their Premier Advantage package - think from memory 0.6% off the interest rate of variable loan - nothing overly special but still better then nothing. Hello everyone, After some suggestions and ideas about how to put a concrete path around the drop edge beam area on our new build. We are required to have a concrete path… 0 12873 The distance between my DEBs varies from 4.1m at the narrowest to 8.1m at the widest. 5 27307 I would like to build our new house with the rear section approx 1 metre out of the ground, I don't particularly like to go bearers and joists so concrete slab all the way… 0 3822 |