In light of the recent interest rate rises I have had many people ask if they should look at fixing their home loan.
At the time of this newsletter, some examples of current 2 and 3 year fixed rates are as shown in the table below. These figures are based off a loan of $500K, principal and interest repayments with an 80% LVR.
| Owner occupied | Investor | |
| 2 year fixed rates | 4.89% | 5.09% |
| 3 year fixed rates | 5.19% | 5.29% |
Fixed rates were at an all-time low in 2021. At that time, I was encouraging many clients to fix their home loan to secure the low rate and repayment amount to protect them from future increases. While fixed rates are starting to come down a little, they are still high. You need to consider the gap between fixed rates and variable may be too great to warrant fixing your interest rate. As rates increase, spending should slow and therefore continued rate increases may not be likely when there is reduced spending in the economy.
