Fixed rate loans are currently at record lows in Australia (since we have been brokers in the last 8 years). They also might still drop, so how do you know when is it a good time to fix your loan?
That depends on your circumstances. We have a unique fact find that can help you un cover if fixing your loan could be right for you.
The Pros and Cons Of Fixing Your Loan
The pros of fixing your loan are: knowing your payment, possible beating the market but even more importantly managing your risk of maybe not being able to pay your loan if interest rates were to rise significantly.
The Cons are- you cannot sell your property for the term of the fixed loan without possibly incurring very large exit fees. There is usually less flexibility with fixed loans such as you cannot have an offset account( although we have a lender on our panel where this is possible). Also you might fix your loan and then the variable rate could fall lower and you end up paying more.
What’s Happening Now?
Currently we have a lot of customers fixing part or all of their loans, even though we are expecting one more possible fall in the fixed rates.