I think that the market will start to factor in more rate rises very quickly. So don’t sit on your hands if you want to be fixed. However if you plan to fix just to save money, my predictions suggest you will end up about square on a three year fixed. And behind for the rest.
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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: I wish I had a crystal ball, as it is possible that the US could respond to their problems in 2012 by printing money to “inflate” out of trouble. However I believe that the US still has plenty of borrowing power left and will not need to go down this path (The UK and Japan may be another matter). Well – the usual situation is that nobody guesses what will happen . . . There are four stages of a loan process when the rate may be locked in: Beware that sometimes there is a (rate lock) fee to lock in your fixed rate, rather than only having the rate locked in at settlement. The questions to ask if you want to take up a lenders rate lock option include the following: I’ve been told there are limits to how much extra I can pay on my fixed rate homeloan, above the minimum repay? What is going on here? With some lenders there is a need to watch what happens very carefully when your fixed rate home loan completes its term. Often the loan will roll over onto the standard variable rate, and this can be much higher than what you can get as a basic variable or negotiated rate. Here are some questions to ask yourself if you are considering fixing. . . |
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