Should I Fix My Interest Rate?

What is A Fixed Interest Rate ?

A fixed interest rate is  exactly that!  It means that the interest rate that you are paying on your mortgage is fixed and cannot move up and down during the agreed term.  In other words, even if the Reserve Bank of Australia announce an interest rate hike, (or drop) your rate is fixed and won’t change for the relevant period.

This allows you to budget more precisely and gives you confidence your repayments won’t change.

How Long Does it Last ?

A fixed interest rate is generally agreed on for a particular term, i.e.  1 – 5 years, depending on what you choose.  During this time, the bank cannot change the rate that you have agreed to.   After this agreed term, you have the option to re-fix it again for a desired term (at the going rate at that particular time) or to revert to a variable rate.

The variable rate will fluctuate as and when the specific lender you are with adjusts the interest rates according to market movements. See the above example where ANZ has recently increased their fixed rates.

Should I go Fixed or Variable ?

Without a crystal ball, this is anyone’s guess.  What you need to consider though is your current employment status, cash flow, future plans and overall financial position.

If this is confusing, let us travel this journey together. As a broker, we have the experience and knowledge to navigate through the complex policies and products of our many different lenders. This offers you choice and improves your chances of finding a competitive loan that is suitable to your specific needs.  Knowledge is key, why wouldn’t you ask for help along the way ?

 

Call us today,

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Disclaimer:

This article is written to provide a summary and general overview of the subject matter covered for your information only. Every effort has been made to ensure the information in the article is current, accurate and reliable. This article has been prepared without taking into account your objectives, personal circumstances, financial situation or needs. You should consider whether it is appropriate for your circumstances. You should seek your own independent legal, financial and taxation advice before acting or relying on any of the content contained in the articles and review any relevant Product Disclosure Statement (PDS), Terms and Conditions (T&C) or Financial Services Guide (FSG).

Please consult your financial advisor, solicitor or accountant before acting on information contained in this publication.