Posted by: Melinda | 2008/06/11

Interest Rates - John, u can also reply

I know this is probably not the right question to ask here but I couldnt post it on any of the other forums. Do you think its wise to fix your current bond rate???? Or just leave it as is just in case the interest rates do come down??
Please, I have spoken to numerous people and everyone has a different opinion.
Thanks so much

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Posted by: John | 2008/06/11


The decision is entirely dependent upon whether interest rates will rise in the short (12 months) to medium (24 months) or not. There is no firm guarantee either way. If I had a bond, I would fix my rate now as the rate, I believe (because of what I've read by real experts!) won't come down before the end of next year. Not only that, they are liable to rise and rise. Back in the early 90s we peaked at an unthinkable 25.5%. So fix it for 18 months and be sure that your bank does not 'penalise' you for fixing it by fixing it at 2 basis points higher than the current rate. If they, consider moving to another bank (like SA Homeloans) qand negotiate there.

Reply to John
Posted by: D | 2008/06/11

Hi Melinda

you can fix it for 12, 18 or even 24 months.

i had mine fix recently to 24 months.
Will see after 2010.


Reply to D
Posted by: Sg | 2008/06/11

It depends on how long you want to fix it for as we will probably see at least another 2 pc hike in interest rates before we see a move down again.This won't probably happen until next year.
You must also not forget that the "market" factors in their view on the rates when deciding what to charge/pay ! In other words you will find that a bank has already built into their pricing at least a 1 pc hike in their pricing.When the interest rate cycle is nearing an end it is not the right time to fix rates ie particularly of course in an upward direction.
If you believe interest rates will move up by more than say 2pc in the next year or so then consider fixing it now for a year or two,if not then it is probably best to leave things as is.

Reply to Sg

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