Variable HELOC or fixed at this point in the economy?

3 Replies

I'm currently building a duplex that I'm funding using HELOC money on 2 properties that I own. I'm going to be maxed out on a rental SFR and I'll be close to maxed out on my primary residence. Total funds loaned will be in the $350 range. Both loans are variable and in the 5.5% interest only range.

Once the duplex if finished next month, I could convert everything to a fixed rate and pay off the other 2 properties. I think the real question is probably around how much these variables could rise. 

My intention is to pay everything off sometime in the next year. I have another investment coming due that will allow me to pay all the properties down to zero, but I'm not counting 100% on that. I'd like to prepare as if that money is delayed. 

Is there general advice right now to get money onto a fixed rate asap, or is there projections for continued low rates?

Thanks

@Garen T. , if you can pay down HELOCs that quickly, it doesn't really matter much imho. Some people hedge their bets, and go 50/50 fixed/variable (or some other ratio according to their best gambling/research beliefs, but then focus on paying one down quicker than the other once rates actually change). You know the pros and cons, so we can't really choose for you. My 2c...

@Brent Coombs   
Let's say the repayment would not happen and I was going to keep it leveraged. Is there a current thought of fixed vs variable in the economy?
I do like the idea of doing a 50/50 between the two. Hadn't thought of that.

Originally posted by @Garen T. :

@Brent Coombs  
Let's say the repayment would not happen and I was going to keep it leveraged. Is there a current thought of fixed vs variable in the economy?
I do like the idea of doing a 50/50 between the two. Hadn't thought of that.

My own leaning is somewhat towards a (historically low) fixed rate, rather than variable.

[Once the world says "peace, peace", won't banks (suspiciously) find reasons to increase rates?] 

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