Fixed rate or Variable mortgage!

[Andrew from Vista Financial]

With the recent rate rise announced of 0.25% and most of the Banks already following I am sure that a lot of people are considering fixing their existing or new mortage rates.

 

Clearly at the moment it looks like rates are only going to go up and some were predicting an increase of around 2%.

 

What you need to consider is how long will it take for that rise to happen, Australia are coping very well in the scheme of things but there is still a fair bit of uncertainty out there so for such a sharp rise to occur it could have an adverse impact.

 

That is not to say it will not happen though but considering you can still get Variable rate mortgages for the low 5%'s then you could end up saving a fair bit of money in the interim whilst/if the rates on a variable mortgage get to the same as the fixed mortgage .

 

For a 2 year Fixed Rate Mortgage at the moment the range is generally between the mid 6%'s to low 7%'s depending on lender of course.

 

For 3 year Fixed Rate Mortgages the range is somewhere between the high 6%'s to mid 7%'s.

 

With Fixed Rates at these levels they certainly do not seem an attraction proposition at the moment and the Banks seem to have factored in future rises.

 

Of course not every will suit a Variable rate and each individual has differing requirements but just thought I would give some food for thought.

 

 

 

Regards

 

Andy