Sanjay’s Interest Rate News – Interest Rates to fix or not to fix ?

This is the question facing home owners in the current interest rate climate. With the official cash rate expected to remain static in the short term, should home-owners look to fix their mortgage before a potential rate rise occurs?

Interest Rate News: to fix or not to fix ?

This is the question facing home owners in the current interest rate climate. With the official cash rate expected to remain static in the short term, should home-owners look to fix their mortgage before a potential rate rise occurs?

The word out of the United States is that the Federal Reserve will raise interest rates there later this year, potentially around September. Europe is expected to follow suit early next year, so what does this mean for Australia. We anticipate that rates will remain low for the foreseeable future. A rate rise towards the middle to end of next year is the most we expect the Reserve Bank to raise rates. Another rate fall is even possible later this year.

The important fact to note, is that banks would not offer fixed rates if they were not making money out of it (and we all know what bank profits are like these days). If we look at the history of interest rates, at no point over a five year term would a fixed rate have saved a customer money.

To keep a mortgage on a variable interest rate takes the gambling out of predicted rate rises and leaves customers paying market rates for the length of the loan.

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