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 ?


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