Is it wise to lock into a fixed-rate home loan or should you continue to keep a keen eye on the market?
Up to 30 per cent of new home loan customers are fixing the interest rate on all or part of their borrowings, a record market share for fixed-rate loans in Australia.
If you’re considering a fixed-rate deal, you need to research all your borrowing options and be aware of the risks.
You shouldn’t blindly accept that the interest rate cycle is at the bottom, either. Many economists and commentators believe the Reserve Bank is engaging in a ”tactical pause” on rate cuts.
”I think it’s too soon to lock in,” says adviser Richard Wakelin, of Wakelin Property Advisory. ”It may not happen next month or the month after, but there is room for another rate cut.”
The RBA held its cash rate at 3 per cent at its March and April meetings. On both occasions the bank said slightly sub-par economic growth gave it the room to cut rates again if necessary.