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Mortgage war erupts as CBA, NAB, Westpac slash interest rates; CBA cuts 70bp from its five-year fixed mortgage rate to 4.99%
Topic Started: 23 Jul 2014, 01:45 PM (10,159 Views)
b_b
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zaph
25 Jul 2014, 09:35 AM
Peter,

Do you have many clients that use their homes as collateral to buy share portfolios?
I do.

My Bank (NAB) set up a portfolio facility secured against my home. The facility is equal to about 20% of my home value.

The facility allows be to buy shares with debt and deduct the interest (negatively gear). It is a very efficient way to invest.
(S – I) + (T - G) + (M - X) = 0
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MMM
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Shadow
25 Jul 2014, 01:32 AM
I have never denied that prices fell during 2004, 2005, 2008, or mid 2010 to mid 2012. In fact I have discussed these falls frequently.

If you believe I ever denied those falls, then please provide a link as evidence. Otherwise, we know this is just yet another one of your many tall tales.
I was referring to the drops shown by the end of 2012, you denied it was happening at the time yet you now acknowledge this. I could waste my the finding it, but that would just be a further waste of my time.

Maybe go back and respond to everything else then I will find it for you.

I can show everybody where you said in 2007 that the Sydney median would be $1,250,000 by 2014. And that was going off your assumptions that prices double every seven years without fail, because that is about the scope of your delusion. Then what happened, the GFC hit, and ALL of a sudden you changed your tune, moved the goalposts, whatever you want to call it. Then you changed it to $1,000,000 by 2015.

But you always claim that you only ever said the $1,000,000 job by 2015. And say you don't lie. But members on that forum called you out, after you claimed this and they showed you your fantasy call from 2007 claiming $1,250,000 by 2014.

:bye: does this smiley face mean its not true like you claimed yesterday.

The smiley face just means I am rubbing the facts and reality into your face, that's all, but you can claim what ever fantasy you like :bye:
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zaph
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b_b
25 Jul 2014, 09:51 AM
I do.

My Bank (NAB) set up a portfolio facility secured against my home. The facility is equal to about 20% of my home value.

The facility allows be to buy shares with debt and deduct the interest (negatively gear). It is a very efficient way to invest.
Thanks BB

I knew it was possible, just wondered how common it is.
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Shadow
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Evil Mouzealot Specufestor

MMM
25 Jul 2014, 09:54 AM
I was referring to the drops shown by the end of 2012, you denied it was happening at the time
Like I said, evidence please. Otherwise, we know this is just yet another one of your many tall tales.
Here we go, a post from me in 2012 with my chart showing the falls that you claim I deny happened. So you have been caught out spinning yet another fantasy tale Ted... :lol

http://australianpropertyforum.com/topic/9699747

Quote:
 
(Previous weekly reports are here and the source data is here)

Update for week ending 07 September 2012

Posted Image
Edited by Shadow, 25 Jul 2014, 10:31 AM.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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Sydneyite
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zaph
25 Jul 2014, 10:04 AM
b_b
25 Jul 2014, 09:51 AM
I do.

My Bank (NAB) set up a portfolio facility secured against my home. The facility is equal to about 20% of my home value.

The facility allows be to buy shares with debt and deduct the interest (negatively gear). It is a very efficient way to invest.
Thanks BB

I knew it was possible, just wondered how common it is.
I do this too, FYI. A typical set-up (which I use) is to set up a seperate LOC account, secured by my house as a part of my over-all mortgage package, which is used exclusively to fuind a share portfolio.
Edited by Sydneyite, 25 Jul 2014, 11:13 AM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Ex BP Golly
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Did Shady predict $1.25m by 2014?

I remember some discussion on it.

WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Trojan
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peter fraser
25 Jul 2014, 09:23 AM
Shares like property have allowable deductions, but unless you have leveraged your shares heavily I don't see how you would be negatively geared.
I guess it's possible he bought into shares which pays little dividends
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Admin
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Australians would rather float than fix on mortgages, despite low rates

July 25, 2014 - 1:03PM
Melanie Kembrey

The country's biggest banks may have slashed their fixed mortgage rates, but historically home buyers prefer to try their luck when it comes to borrowing costs.

Unlike most other countries, we are a nation of risk takers who opt far more for the flexibility of floating loans rather than the certainty of a set interest rate.

The Commonwealth Bank, NAB and Westpac are engaged in a fixed mortgage war, yet on average only about 12 per cent of home loans have been fixed during the past 22 years.

While this new chance to lock in record low interest rates at less than 5 per cent may whet the appetite for fixed home loans, they have never dominated the Australian market in the same way as in the US and Europe.

The proportion of fixed rate mortgages reached its peak at 25.5 per cent during the global financial crisis, according to Australian Bureau of Statistics data, as home buyers feared rates would keep rising and squeeze household budgets. It stood at 14.9 per cent of home loans in May, having stayed close to that level for the previous four months.

Australians' preference for variable rate mortgages proved helpful during the GFC, as it gave the Reserve Bank of Australia a direct way of stimulating the economy when needed.

Variable loans fluctuate with the cash rate, which has been set at an unprecedented low of 2.5 per cent for almost a year. Fixed loans reflect the outlook for the cash rate and bet on it being increased.

Mortgage and Finance Association of Australia chief executive Phil Naylor said there is "something in the Australian psyche" that leans towards being carried by the market rather than fixing against it.

The possibility of making a saving if interest rates drop and of being able to pay the loan out early entices home buyers to variable rates, he said. Until recently, it was also variable rate loans that were flogged to homebuyers rather than fixed.

"It's always been the case. It's just been traditional in Australia that Australians have opted for variable rates. They prefer that flexibility rather than being caught in a fixed rate mortgage when rates go down," Mr Naylor said.

Another reason home buyers might prefer variable rates is because mortgage rates can only be fixed for up to five years in Australia, HSBC Australia and New Zealand chief economist Paul Bloxham said.

Read more: http://www.smh.com.au/business/banking-and-finance/australians-would-rather-float-than-fix-on-mortgages-despite-low-rates-20140725-zwj6t.html
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http://www.yourmortgage.com.au/article/why-you-shouldnt-fix-your-interest-rates-116817.aspx


Why you shouldn't fix your interest rates
By Nila Sweeney

With growing speculation that interest rates are set to come down, should borrowers ignore low fixed rate offers and keep their mortgage on a variable interest rate?

In recent weeks, the finance industry has gone from predicting several interest rate hikes in the next 12 months, to a potential rate reduction by Christmas.

It’s making more than a few mortgage holders across Australia nervous. Some have responded to ever-changing sentiment by locking in some rate stability, with the appetite for fixed rate home loans reaching its highest level in five months, reports Mortgage Choice.

“Perhaps the constant speculation about interest rate rises in the latter half of 2011 and beyond convinced a higher number of borrowers to simply lock in their rate, rather than feel their stomach churn with each piece of speculation,” says Kristy Sheppard, corporate affairs, Mortgage Choice.

“Over the past month we’ve seen several lenders reduce their fixed rates on home loans. Now, there’s one tenth of a percentage point between the average three-year fixed rate, traditionally the most popular with borrowers, and the average basic variable rate. We haven’t seen that close a comparison in some time.”

What this means is that borrowers can obtain a three-year fixed rate loan right now at the same interest rate as a variable product.

This is great news if you believe that interest rates are headed north – which, up until a few weeks ago, is what most lenders and economists had predicted. If rates decrease as Westpac recently forecast, however, you’ll be stuck paying more for your mortgage than you need to.

Trying to guess what the banks will do with interest rates is just that – a guess – but Smartline Personal Mortgage Advisor Linda Clucas says borrowers can educate themselves to try and make the best, most informed decision for their own situation.

“In order to understand what worries the RBA, you need to know that they have a ‘fight inflation first’ approach, and aim for a target range between 2% and 3%,” she explains.

“There are four important leading indicators that I know the RBA keeps a close eye on to predict future inflation growth; wages growth, low unemployment, high consumer confidence and credit growth.”

We currently have two of the four: modest wages growth and low unemployment. “On the other hand, we have low consumer confidence and near zero credit growth, hence the holding pattern with rates,” she says.

This means that the Reserve Bank’s decisions over the coming months could go either way – and of course, there’s nothing stopping the banks from lifting their mortgage rates outside of an RBA movement.

At the end of the day, no one can predict with any real certainty where interest rates will go. If you can afford to weather the peaks and troughs it may pay to stick with a variable loan and hope for the best. Otherwise, consider fixing half of your mortgage so that at least part of your monthly mortgage payment is stable.
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newjez
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Oh shit. Either the rba got it very wrong, or something has changed.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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