should you fix your interest rate
You can be better off with fixing your rate half the time according to the below article I cam across.
Remember, there is no right or wrong with fixing. It comes down to your risk tolerance, that is all,
do you need to know what you are paying next month and next year?
“Researcher Canstar, which has analysed 20 years of home-lending data, has found that in half the
cases where a borrower takes a fixed-rate mortgage, the borrower has paid the lender less in interest
than if they had taken a variable interest-rate mortgage.
The results overturn conventional wisdom,
which says most borrowers who opt for fixed-rate mortgages lose out to lenders.
Canstar’s research finds the biggest winners over the past 20 years have been borrowers who
took a three-year fixed mortgage in November 2005.
At the start of the period the cash rate was 5.5%. It increased to 5.75% in May 2006 and steadily rose
from there to reach a peak of 7.25% in March 2008, where it stayed until September that year.
Canstar estimates these fixed-rate borrowers with a $300,000 interest-only mortgage were ahead by about $15,000 over the three years compared with borrowers with variable rate mortgages.” hotspotting
This is a useful bit of information above. No once can advise you whether to fix your rate, it
must be your own decision. I decision to be made after taking into account a number of considerations.
Contact me if you would like to know what those considerations are. They are ‘must know’