As your local mortgage broker, one of our most frequently asked questions is about timing the market to fix interest rates. We’re often asked “Should I fix now, or should I wait and see if interest rates get even lower?” It might sound like a simple question, but giving you an answer is not as easy as you may think. And that’s not just because it’s difficult to predict what interest rates will do – it’s because you need to consider the question: “Is fixing my interest rate the right strategy for me?”
Fixed interest rate loans – the pros
Many people, particularly first home buyers, find it difficult to decide whether to fix their interest rate or go with a variable rate when they first take out their mortgage. They’re both good options, and deciding which one to take very much depends on your personal financial circumstances and future property investment goals. But let’s just look at fixed interest rate loans.
Fixed rate home loans are designed to help you lock in your interest rate for a set period of time – usually 1, 3 or 5 years. The two main advantages of fixing your mortgage interest rate are: