I think the world is moving towards a synchronised double dip recession – US, Europe, China, UK . . . . I think variable interest rates could possibly end up below 5% by July 11. I don’t need to write much else.
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I think this will lead to a fall in the interest rates of fixed loans, or will mean no increase in what is being offered for a while. I still think variable rates will go up another half a percent in the next four months. I have updated my main post Excuse me if I state the obvious here! There are times when a fixed rate home loan can provide some certainty over a period of extra financial or emotional stress. Interest rates can move further than you expect. It may be worth considering fixing a significant part of your borrowings in the following circumstances: Many errors were made from about Jan 02 to Dec 04 with staying variable, and from about Jan 07 to June 08 with people fixing for long terms. You can see on the charts that from Jan 07 to June 08 there was not much pressure for rates to go up further. However in Jan 02 to December 04 there was significant upward pressure on rates. This indicator could have assisted many borrowers at these times, to make a better decision on whether to fix or not. |
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