Fixed Mortgage
Home loan interest rates have fallen considerably in the past six months. Back in 2008, rates were nearing 10 per cent. As the rates crept up, many home owners chose to fix their rate to protect themselves against more increases. 
But, then from September onwards, as the Reserve Bank started slashing official rates, home loan rates fell each month. Anyone who fixed their rate is now paying much higher rates than those on a variable rate. However, here we are in April 2009, rates are low and consumers taking out a new mortgage today, would be well advised to fix their rate now while they are low. The Loan Market Group says fixed rates have already started moving up, even though the Reserve Bank of Australia is expected to keep lowering the cash rate this year.
Loan Market Group executive director John Kolenda said many consumers are unaware that the variable rates move differently to fixed rates and by the time variable rates have bottomed they have missed the best opportunity to fix.
Last year saw home loan rates nearing 10 per cent. In the past six months rates have fallen by around 4 per cent with some products down to below 5 per cent.
Fixed rates provide certainty to borrowers who want to budget and a combination of part variable/part fixed gives flexibility should rates drop further than anticipated.
The Reserve Bank meets tomorrow to discuss official interest rates. If the cash rate is cut again, home owners will be hoping that the banks pass on the cut to them.
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