Is it time to fix my home loan?
Interest rates are at a historical low and fixed-rate loans are growing in popularity as borrowers look to lock in before rates do an about-turn and start to go back up.
At the moment the average three-year fixed-interest rate is 5.10%, 0.34% lower than the average variable home loan rate at 5.44%.
This means that at least another two cash rate cuts of 0.25% would be needed before those who fix now are paying more in home loan repayments.
If you are considering a fixed-rate loan, understand the restrictions of the loan or look for one - and they are a growing breed - that offers similar features to a variable loan, such as offset accounts, and allows large additional repayments without attracting penalties.
This is particularly important for home buyers so they can get ahead on their repayments and save some interest cost.
For investors (who generally consider longer terms), understand what your investment intentions are and ensure the term chosen fits in with this strategy.
If consideration is being placed on selling in the short term, fixing your interest rate for three or five years may attract break costs should you sell before the end of the fixed term.
If in doubt, there is always the option to split your loan between fixed and variable.