In recent days we have seen the major lenders decrease their fixed interest rates. Are we at the bottom of the interest rate cycle? It is difficult to predict in the short term if interest rates will increase and how dramatic that increase will be.
Fixed rate loans can provide "peace of mind' as you will know exactly what your repayments will be for the fixed period. However,if your circumstances change and you wish to exit your loan before the end of the fixed term you may be up for substantial "break costs". These costs could run into the tens of thousands of dollars.
Some people have taken an "each way" bet and have split their loan into a fixed component and a variable component.