Fixed Interest Rates Hit Record Low
Over the past six months fixed interest rate home loans have declined faster than those of variable interest home loan rates, and almost half of these fixed interest rates have reached record lows of under 5%.
Despite this, most Australian’s still prefer having a variable rate home loan, and experts agreed that variable is usually the best way to go.
Recently, the Reserve Bank of Australia (RBA) put interest rates once again on hold, but that’s not to say that another rate cut isn’t on the horizon. Many economists believe the RBA will announce another cut this year, which would have an impact on variable rates. However, Kirsty Lamont, director of Mozo, said that lenders are now pricing in more fixed-rate cuts.
As of July, borrowers can fix their home loan as low as 4.54% for 12 months, and they can fix it as low as 4.73% for three years.
Lamont suggested that rather than going completely with a fixed-rate loan, it would be a good idea to split the loan with both fixed and variable components so you can get the best of both worlds.