Episode 4: Are you ready for an interest rate rise or four? | Why you must do the opposite of everyone else | 7 questions to ask before locking in on interest rates

In today’s podcast 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?   5

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 minute, I discuss why you should be doing the opposite of everyone else.

Then I 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” really 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:

  1. We’re in the middle of a credit squeeze and banks have already raised interest rates 
  2. The Reserve Bank wants to keep the Australian dollar weak 
  3. The world’s economy is still sluggish

Mindset Message: Why you must do the opposite of everyone else.

  1. Become great at something by focusing on that one thing and putting all your eggs in one basket.
  2. Choose one thing and do it really well and become an expert at it.

7 questions to ask before locking in on interest rates:

  1. Will I want to sell during the fixed rate loan?  interest-rate-300x225
  2. Will I want to access the equity during the fixed period?
  3. Do I need an offset account?
  4. Can I make extra repayments on my loan?
  5. What balance of fixed and variable rates do I need in my portfolio?
  6. How long should I fix my rates for?
  7. If rates fall, what will locking in today cost me?

Links and resources:


“Once the economy improves, the Reserve Bank may need to increase interest rates.” Michael Yardney  economy property market grow wealth house dream first home

“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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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au

'Episode 4: Are you ready for an interest rate rise or four? | Why you must do the opposite of everyone else | 7 questions to ask before locking in on interest rates' have 6 comments

    Avatar for Michael Yardney

    September 1, 2017 Rob

    Hi Michael, I’m really enjoying the podcast so far. My question is, as a first home buyer with a limited lending capacity, who wants to get into property investment, would it be better to buy something, be it a house or apartment just to get my foot in the property market, or hold off, continue to save until the bank will loan me more money? I’m also living at home and desperately trying to avoid having to rent, as that will dry up my savings.


      September 1, 2017 Michael Yardney

      Rob – your first property is probably the most important property- if done correctly it will be the springboard to building a property portfolio, but if you buy the wrong property you’ll be stuck like the very high proportion of investors who sell up or never get past their first property.
      So keep educating yourself, sabe your ent (if you can) and wait until you can afford an investment grade property.
      Thanks for listening to the podcast


    Avatar for Michael Yardney

    August 22, 2017 Harris

    Thanks so much for creating this podcast Michael. I’ve enjoyed your blogs for years, now I can listen to you ont he way to and from work. Keep up the good work


      August 22, 2017 Michael Yardney

      Thanks for the kind words Harris – I’m having real fun putting these podcasts together so it’s good to know they are appreciated


    Avatar for Michael Yardney

    August 22, 2017 Andrew

    I have found spreading your risk by fixing rates for 2yrs, if you have multiple loans stagger them do a 1yr, 2yr or 3yr fixed so they don’t come off all at same time if rates are ugly. Before doing so check the best rate on offer & go to your Bank and ask for a pricing request to match or better oppositions rate. Its not that easy anymore to jump from Bank to Bank as the stress test on lending serviceability is now 7% or better, also don’t assume Interest Only Loans will be around forever. Principal & Interest fixed rates are still low. Don’t trust Banks they have been doing gradual increases outside RBA moves for the past 12 months…….you only know about it when you get a letter.


      August 22, 2017 Michael Yardney

      Thanks for the comment Andrew – great advice – like you I stagger my fixed rate facilities


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