Today I discuss a very important topic for property investors - the future of interest rates.
Do you think they are going to stay the same, fall or rise?
Would you be surprised if they went up eight times in the next two years? One expert believes that could be the case.
Could you cope with that?
In my mindset moment, I discuss why you should be doing the opposite of everyone else. And this doesn't just relate to real estate investing.
I will also share with you seven questions you should ask before locking in interest rates.
Today’s discussion includes: How John Edwards, a former Reserve Bank board member, predicts interest rates will go up eight times. What “normal interest rates” rally are Why if rates do rise significantly, it would mean that the economy would be booming and that could be a good thing.
3 Reasons Why It Is Unlikely for Interest Rates to Go Up Any Time Soon: We’re in the middle of a credit squeeze and banks have already raised interest rates The Reserve Bank wants to keep the Australian dollar weak The world’s economy is still sluggish
Mindset Message: Why you must do the opposite of everyone else. Become great at something by focusing on that one thing and putting all your eggs in one basket. Choose one thing and do it really well and become an expert at it.
7 questions to ask before locking in on interest rates: Will I want to sell during the fixed rate loan? Will I want to access the equity during the fixed period? Do I need an offset account? Can I make extra repayments on my loan? What balance of fixed and variable rates do I need in my portfolio? How long should I fix my rates for? If rates fall, what will locking in today cost me?
Links and resources: Michael Yardney Metropole When will interest rates rise? John Edwards’ interest rate prediction Rich Habits Poor Habits
“Once the economy improves, the Reserve Bank may need to increase interest rates.” Michael Yardney
“To be successful, you need to dismiss common beliefs.” Michael Yardney
“Locking in interest rates gives you an advantage of knowing what your commitments will be for a predetermined time.” Michael Yardney
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