Ask Andrew - Is now the time to fix?

November 01, 2017
Catriona Gillespie

There is no denying that the level of ‘interest rate chatter’ has intensified in recent weeks. Whether it’s chatter in the paper or around the water cooler at work, it seems everyone has an opinion on interest​ ​rates.

The official cash rate set by the Reserve Bank of Australia is part of what determines the interest rates your lender charges you on your mortgage. It has been 14 months since we’ve seen any movement in the cash rate, but speculation is mounting that we could see an upwards rate adjustment​ ​at​ ​some​ ​point​ ​over​ ​the​ ​short​ ​to​ ​medium​ ​term. 

Over the past few months, we have seen positive economic data emerging from both the domestic and​ ​global​ ​economies. 

In the US, the Federal Reserve has lifted the cash rate three times within the last 12 months. Closer to home, we have seen a strong improvement in employment, and a slight bounce back in consumer sentiment​ ​and​ ​business​ ​conditions. 

As a result, a number of economists are starting to suggest that we may see a rate rise as early as mid​ ​2018.

At Mortgage Choice, we are constantly met with questions around when we think the Reserve Bank will​ ​make​ ​a​ ​change​ ​and​ ​if​ ​now​ ​is​ ​the​ ​right​ ​time​ ​to​ ​fix​ ​all​ ​or​ ​part​ ​of​ ​a​ ​mortgage.

Unfortunately,​ ​there​ ​is​ ​no​ ​simple​ ​answer​ ​to​ ​these​ ​questions. When it comes to fixing your mortgage, there is no right or wrong time to do it. Instead of trying to pick when the best time to fix is, the best thing you can do is speak to me and find out whether​ ​fixing​ ​part​ ​or​ ​all​ ​of​ ​your​ ​mortgage​ ​suits​ ​your​ ​unique​ ​financial​ ​situation. 

Regardless of whether you choose to fix your home loan or remain in a variable product, the key is to​ ​not​ ​take​ ​a​ ​set​ ​and​ ​forget​ ​attitude​ ​towards​ ​your​ ​mortgage.

There is a lot of competition and moving parts in the market at the moment, so it is critical that you review​ ​your​ ​home​ ​loan​ ​at​ ​least​ ​once​ ​a​ ​year,​ ​if​ ​not​ ​more​ ​regularly. 

Over the last few weeks, we have seen a number of lenders cut the interest rates across their suite of​ ​products​ ​in​ ​a​ ​bid​ ​to​ ​attract​ ​more​ ​business. 

Many​ ​lenders​ ​are​ ​currently​ ​offering​ ​fixed​ ​and​ ​variable​ ​interest​ ​rates​ ​below​ ​4%. 

So, regardless of whether you choose to fix your mortgage or ride the variable interest wave, you can​ ​be​ ​assured​ ​of​ ​snagging​ ​a​ ​very​ ​competitive​ ​rate. 

Expert advice at no cost to you, just ‘Ask Andrew’ by completing the contact form at the top right of this page or call on 9401 9244 or 0412 498 872 to book an obligation free appointment​ ​today​ ​to find out what your options are and what might work best for your circumstances.

Posted in: Refinancing

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