As market uncertainty grows, more investors and borrowers are locking in fixed term interest rates.
http://www.apimagazine.com.au/api-online/news/2011/08/investors-rush-to-fix-interest-rates
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What to consider about fixing
ReplyDeleteIn the end, as with all investments, “time” and your “other needs” (including life goals) are major criteria in choosing whether to fix your interest rates. In the case of a mortgage, how long you expect to have the debt will have a strong impact on whether you choose to fix or not. And if you do, when you choose to do it, and for how long.
Is the peace of mind of known payments more valuable to you, say, than the extra money spent if your fixed rate turns out to be higher than the variable rate after 5 years?
Are your budgeting skills strong enough to allow extra money towards your mortgage when interest rates rise? Without impacting your lifestyle? And without racking up a credit card debt
Believe it or not, though, most people who have a fixed rate home loan do not end up saving money. Statistically, variable interest rate home loans pay less over time than people on fixed rates. A variable rate on a home loan often starts out higher than the fixed home loan, but will decrease over time.
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