With interest rates at records low, many borrowers are considering to fix their home loan. The tricky part is knowing when is the right time to put this in place.

Below are four things to consider if you’re looking to fix your interest rate

  1. Look at the changes in the current fixed rates, rather than variable rates
    We often hear comments from borrowers that they will look to fix their interest rates, once the variable rate starts to increase.
    However by the time variable interest rates start to increase, fixed rates will usually already have increased and it may be too late.
    The key is to keep an eye on when the banks increase fixed rates. This can give you an indication of when the variable interest rate will start to increase.
  2. Be aware fixed rates come with restrictions, that could hamper your ability to pay down your home loan sooner

For example fixed rates

  1. Don’t usually allow you to have an offset account
  2. Restrict extra repayments
  3. Can come with large break fees, if you payout the loan within the fixed rate period

Therefore if you’re looking to do any of the following, a fixed rate may not suit your situation

a. Make extra repayments on your home loan
b. Selling in the near future
c. Refinancing your home loan soon

If you would like the certainty that a fixed interest rates provides, and the above is not relevant to your situation, a fixing or part of it, may be worth considering. The most competitive interest rates from our panel of lenders are listed below

  • Leading variable rate 3.79%
  • 1 year fixed rate 3.69%
  • 2 year fixed rate 3.69%
  • 3 year fixed rate 3.79%
  • 5 year fixed rate 4.19%

If you have any finance questions you would like to discuss, feel free to reach me on 0434 514 533.