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Why now is the time to fix your rate

Why now is the time to fix your rate

The RBA announced in November that the cash rate would be left unchanged for the fifteenth consecutive month. This has led to speculation that an interest rate rise could be on the cards soon. Most major economists* are predicting that they will increase around mid-2015, so now is the time to start planning for greater repayments.

Borrowers should be putting strategies in place now to deal with the consequences of a future rise. Something important to consider is fixing your loan. The current mortgage wars have seen lenders slash many of their fixed rate products to below 5%, a level never seen before. As a result, demand has surged for this type of loan among investors seeking to plan ahead and take advantage of the record low rates on offer.

Locking in a low rate is not the only attraction fixed loans provide those investors. As the name suggests, the rate, and therefore repayments, remain unchanged for the period. This protects the borrower against the effects of rising interest rates. It also allows for accurate budgeting and better planning, which can often be difficult in uncertain times.

With the high level of competition among lenders and the fact that borrowing has never been this cheap in almost 50 years, you now have the perfect opportunity to fix your rate. Do not fall into the trap of thinking that these historically low rates are the norm. Be proactive, secure your future before missing out.

If you think now is the time to fix your rate, Finance Detective can find you the lowest fixed rate that suits you. Call us on (08) 9289 7777 to book an appointment.

You can also read our blog on Fixed vs Variable Rates to learn more about whether this is something that would interest you.

*Rates are on hold – but for how long?

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