The markets are a bit bumpy at the moment – should I be looking to changing my loan to a fixed rate?
That is a great question. Unfortunately it's not an easy one to answer with 100% certainty.
In my personal opinion though it's unlikely that the RBA is going to increase rates in the near future. The thing that we do have to be mindful off is that the banks & lenders are starting to move independently of what the RBA are doing. To allow some certainty for our clients we are recommending that they fix a portion of the loan. Therefore for you the stability of being able to budget for a certain part of your repayment but still benefit should the rates move in downward direction.
I hope this helps & please feel free to contact me should you wish to discuss further I would be happy to help.
Rebecca Awesome Lending Solutions
Fixing your loan provides some comfort around potential rate rises. One thing you need to note is that once you lock into a fixed rate; you typically cannot pay out the loan before the fixed rate term expires without incurring a penalty. Just like rates can rise; they MAY possibly fall a little further as well. If you are looking at fixing; you may want to consider fixing a portion of your loan and leaving the other portion at a variable rate. If things start turning ugly and rates rise; you can then look at fixing the variable portion as well (note that fixed rates may be higher at this point in time)
The other thing to consider is that most fixed rates have restrictions on paying extra repayments without penalising you. Further to this if you currently have an offset account on your loan and redraw then this combination of features is not typically available with fixed rate loans. Having said that; I do have access to a lender that allows you to pay unlimited extra repayments without penalty and also includes a 100% offset account and the ability to redraw as well.
Please feel free to contact me if you need more information.
There's no simple answer to that, but....it depends on your reason for fixing. My experience tells me, that those who simply lock a fixed rate as they 'think' they'll play the rate game and win, usually don't.
Over the longer term,generally, someone on a variable rate would come out in front of those always fixing.
That said, if you're comfortable with the repayments on whatever the fixed rate is, & you want some certainty that your repayments will stay the same for a number of years (handy during maternity leave for example), then by all means, fix your rate.
If rates fall after you fix, you just need to remember the reason you fixed, being certainty, not lowest rate.
You'd really benefit from having someone look at your entire situation before making the jump though.
personally after 21 years in the mortgage space have never witnessed anyone winning with a fixed rate .
BUT if you wanted this product , get your broker to select a funder that has an offset account attached for surplus repayments that can be redrawn ...