Whats up about house investment property interest rates ?

Given the Reserve bank has raised rates again, whats likely in the future? Lets read the RBA summary, basically they are increasing optimistic into the future. Let us remember its an election year. There are many key state elections before a federal election. Thus the temporary Government stimulus is only going to be withdrawn gradually.
More of the same unfortunately, with  coking coal agreements up 80% on last year and the “spot” market for iron ore up 300% , on last year. The iron ore agreements are not yet released. The steaming coal agreements are also likely to be up strongly.  It is increasingly looking like a two speed economy, stronger for the mining areas and flat for the rest. Minerals and coal are Australia’s key exports, both in value and rising volume terms.

The futures markets give probably the best indication for interest rates, expecting a rise of around 100 basis (1%) points over this year. The interest rates risks might be seen as upside, especially if the USA economy starts to recover! There is even early talk of potentially an “overheating ” effect in the Australian economy within three years.What would a prudent man do? Potentially fix a portion of loans and keep a portion variable. This way if interest rates soar one is slightly protected. If rates fall and one has a windfall gain, one can pay off a portion of the loan without penalty.
Consult your advisor.
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