interest rates..2 fix or not?, page-3

Hi Bingus41,

I'm afraid I have to respectfully disagree with Dlux. As I posted last night on interest rates, I am not convinced that there is significant inflationary pressure to warrant interest rates rising significantly.

Basically I think its a bank/media beat up.

I don't think the Reserve will move rates up significantly based on the following:

(1) Rising Aussie dollar, and the detrimental export effects of a rate rise
(2) The negative effects upon the housing market and flow effects in construction/materials industry
(3) Questionable Australian GDP future growth
(4) Deflationary pressure caused by lack of demand pressure, and the aggressive competition forced upon companies by strict competiton laws and the ACCC

I'm not ruling out some level of a rate rise, but I think 10% on housing loans in 2-3 years is completely wrong - given the economic outlook we've got at the moment.

If I woke up in 2-3 years and saw variable home loan rates at 7-8% I would not be that suprised. But neither would I be suprised if they where exactly as low as they are now.

Having said that, haven't had a close look at the actual products available.

If I had a home loan(which I don't ATM) I would be serious considering sticking with variable...

Thats just my opinion....standing by for the inevitable flak.



Cheers,

Christian