The interest rate debacle can often feel like a Shakespearian tragedy, if we could predict what would happen things would certainly be much easier. Back in 2006 Homeowners who fixed their interest rates were definitely sitting with smug smiles on their faces as rates went up three times…
With an impending interest rate increaseon the horizon, the question is: are fixed rate loans a cheaper or better option?
Variable rates are attractive to people who are in a position to make extra repayments and need the flexibility that this type of loan offers. However, if the rates go up and the lender decides to raise the rates on the loan, then you as the borrower will face higher repayments. The best time to fix a home loan is when the interest rate cycle is close to bottoming, which is now.
Daniel Pym of Loan Markethad this to say “My view is that a lot of investors are now considering fixed rates so as not to be affected by further interest rate increases, fixed interest rates may increase, especially for investors’. He went on to say “there is an amazing 3 year fixed rate on the market right now for both owner occupiers and investors, with a minimum loan of $500,000, and a rate of 3.99% fixed for 3 years’
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to find a broker who can negotiate the best deal.