14 December 2011
With an ongoing expectation that home loan interest rates will fall, lenders are offering some great deals on fixed rate home loans at the moment. Pricing of fixed rates is complex, and rates are driven by market conditions such as availability of funds, expectation of rate movements, general nervousness and investor sentiment, etc
This means that trying to pick the best time to lock in a fixed rate can be very tricky. In fact, many borrowers get it wrong because they are waiting for a signal to show that things are about to turn… but lenders are of course a few steps ahead (being closer to the financial factors that drive rates) and as a s result, they miss the bottom before taking action and locking something in.
The decision on whether to fix or not is complex too and is dependent on your borrower profile, the use of your home loan, your long term plans for your loan, and various other factors. That said, the message here is that if rates fall to a level you are comfortable with, and fixing is something you have thought about, you should consider making your decision based on the fit with your personal circumstances and not on your interpretation of how you think the market will move. Simply because there is every chance you will get it wrong.
These comments are not to be taken as advice in anyway, just comments to bear in mind when reviewing interest rates and considering your options. MyRate reviews our product line-up regularly and we assess user feedback from our customers to ensure we remain competitive. As such , we have some great fixed rates on offer at the moment and we have seen a big increase in the number of borrowers taking up these products.
Which way will fixed rates move next… you would need a working crystal ball to pick that one right!
