Oh, the eternal debate continues over whether to have a variable or fixed home loan! With the release of some interesting new data, we can now look at both offerings in a new light.
The Reserve Bank of Australia data for August shows owner-occupiers on three-year fixed loans were paying, on average, 1.26 percentage points less than those on the discounted variable rate.
However, as the graph below shows, these things move in cycles.
And so, of course, choosing one over the other is not really a one size-fits-all solution.
Fact: Interest rates are currently at a record low.
But, it’s seeming as though the gap between fixed and variable rates will start closing eventually. The Reserve Bank signalling it will start increasing official interest rates once the economy strengthens.
And so, the debate continues.
From our perspective, as with all loans, there is never one solution to meet all needs. A mortgage is an incredibly personal thing. So much consideration goes into securing the “right one for you”.
So, if you're wondering whether to go fixed or variable, here are a couple of things to first consider:
· Does your variable rate have features a fixed loan might not have?
· Do you want the repayment certainty that comes from a fixed loan?
Do you still feel like your situation could use more wriggle room?
Have you ever considered a ‘split loan’––a loan which is part variable, part fixed?!
We are more than happy to thoroughly dissect and discuss all 3 options and find the right loan for you. Get in touch today (or tomorrow!) for a no obligation chat.
Want to compare fixed v variable rates? Let's talk