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Now that rates

ARE ON THE RISE,

what does this mean?

For every $100,000 of lending you have on your home loan, every 0.25% rate rise will result in a $12 per month increase in repayments.

For example, a $500,000 mortgage would receive a $60 per month increase in repayments.

Should you fix?

Well this is a tough question to answer, as 2 and 3 year fixed rates are approximately 1.5% to 2% above a competitive variable rate.

Some points worth considering:

1) The RBA would need to lift rates 6 - 8 more times, for the variable rates to match these fixed rates (assuming 0.25% each time and depends on your exact loan structure).

2) The banks determine fixed rates and the margin they need to charge. Making profit is usually an objective for a bank.

3) Historically, banks will pick a point that will entice customers to fix, knowing that the variable will fall below this. Could this be the same where fixed rates are further ahead than where they actually believe the variable rates will get to?

Having said all this, fixed rates do provide certainty.
If certainty is something you need, then let us know! We will help you find a suitable fixed rate.

Also remember to ask us about rate lock, as this is become more and more important.



- Tony Van De Kerkhof

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