 Variable rates v's fixed rates
Considering the switch from variable to fixed? Experts suggest that variable rates are cheaper in the long run.
Joint head of lending at Centric Lending Services, Sheyne Walsh says fixed rates are now less attractive.
"The pendulum has swung very hard against value on fixed (rate mortgages)," he told AAP.
"If I start the variable home loan rate at 5.05 per cent today, and I increase the rate every ninety days by 25 basis points, at the end of 12 months my rate will be 6.05 per cent ... At the end of three years it will be 8.05 per cent.
For every half a percentage point interest rate rise, monthly repayments increase $41 for every $100,000 borrowed.
Homeowners who can afford to pay a little extra each month are advised to do so in order to create a buffer and pay of off the loan faster.
Reserve Bank research shows that average fixed mortgage rates are around 6.5 per cent but variable rates are only 5.80 per cent.
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