Interest Rates – Where are they going?
“Keep an eye on the fixed rates – these rates are shifting at the moment. Looking across lenders both majors and second tier, the rates on offer are a very mixed bag which basically means that the lenders have different opinions on where rates are going in the next few years. Fixed rates being set now indicate where a lender thinks the cash rates will be in the future. So a 3 year fixed rate of 5.49% (Macquarie) indicates that this lender thinks variable rates will be about there in three years time. Compare with CBA Pro Pack 3 year fix of 4.98% and you can see that this bank is predicting a lower variable rate in three years time. This variation in opinion is showing up all over the marketplace at present.
- In times of uncertainty stay in the variable space and watch to see which way the trend goes.
- If you are wanting to stay with your existing lender watch their space for specials or reductions in fixed rates that might entice you to fix.
- Only fix for 1 or 3 years in case in the future you want to sell a property or change lenders. Breaking a fixed rate can be expensive!
- If you are wanting to look at refinance to capture better rates then get in touch with our finance specialists and we can trawl the market place for the best comparative rates for you”
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.