[/frame_right]There is a lot of tension at the moment about whether the interest rates will go up or down and depending on the day or who you are talking to it can seem very confusing.
If you look at the facts, currently the RBA is concerned about the rate at which inflation is rising. The usual way of slowing this down is to raise the cash rate. However, by raising them consecutively 7 times last year, this has killed consumer confidence and it is at an all time low. This has obviously slowed down the buyers, which is affecting property prices, as there are too many properties on the market.
Secondly, if you look at the banks, most of them are offering very competitive fixed rates, some as low as 6.34% for 2 years. This is currently lower than their cheapest variable rates being offered. This generally indicates that they are predicting the interest rates will go down and by lowering in the fixed rates first, they will lock more people in.
Even if the rates decrease, I believe it will be short lived, as there is so much uncertainty worldwide that unfortunately will affect us directly. So if you are looking for some security in your repayments, it is a very good time to consider these fixed rate specials. It’s very common to split your loan eg 80% fixed and 20% variable. This provides a level of security if the rates go up, while still allowing the flexibility if you want to pay more off your loan.
If you would like to know more about what specials are currently available please contact me
