To Fix or Not To Fix

Many customers are currently asking “Is it a good time to fix my loan?” This is a reasonable question with interest rates at a historical low, in fact the lowest we have seen in a generation!

The answer however, is not straight forward. Some important points to consider are:

• Your personal situation right now
• How risk adverse are you?
• The possibility of major life changes in the foreseeable future
• Your ability to maintain your loan comfortably should interest rates rise
• Are interest rates close to bottoming?
• What is the purpose of your loan?

Almost always the perfect time to fix is when the fixed rates are lower than or similar to the variable rate, particularly when there is the prospect of the rate going up.

Variable rates are the most attractive to people who are in the position to make extra repayments on their loan. Fixed rates on the other hand are suitable for people who want to know exactly what their repayments will be for a set period regardless of the market.

The majority of banks offer, at no additional cost, the option of fixing part of the loan and keeping the rest of it variable. This can help borrowers achieve the right balance between flexibility and peace of mind.

If you’re interested in finding out if fixing your loan is right for you, as well as seeing which lenders are offering the lowest fixed rates, give me a call today.

Grant Rheuben

0423 834 067