Fix or Float?

Here’s this weeks view from Westpac on the question of Fixed versus Floating;

Floating mortgage rates usually work out to be more expensive
for borrowers than short-term fixed rates, such as the six-month
rate. However, floating may still be the preferred option for those
who require flexibility in their repayments.

Among the standard fixed rates, the best deals for borrowers
with a deposit of 20% or more are clustered around the two-year
term, and these offer substantial value relative to where we expect
shorter-term rates to go over the next two years.

There is little point in fixing for just one year, given that these rates are higher
than the two-year rate in most cases. Opting for three- or fouryear
terms would require higher payments up front, but could help
to insulate the borrower if the Reserve Bank follows through with
an extensive OCR hiking cycle.

To view Westpac’s full weekly commentary for the Week commencing 1st September CLICK HERE