answered
Q: My Home Loan has been on a fixed interest rate since I obtained it nearly 2yrs ago. This is due to expire in August and I need to decide to either remain on fixed or go to variable?
A: Hi Glen
Now is a good time to review your lender and product. Now is also a good time to refix, with historically low rates. However, you need to ensure that the term is long enough to make it beneficial, but not too long that takes away your flexibility. If you decide to, or need to break the fixed rate eg bankruptcy, divorce, loss of job, need to upgrade/downgrade home, etc then you will likely have to pay break costs. Depending on loan amount and when in the fixed term you break the loan, these costs could be substantial. Especially, if the differential from market rate below fixed rate is substantial (unlikely in the current market). People fix both for a good rate but more so for certainty of loan repayment. If you want to sit on the fence you could do a combo loan ie some fixed, some variable. Regardless of which way rates move, you will win on one loan type even is you lose on the other. Hedging your bets so to speak. Happy to help you out if you require further assistance.
