Fix or Float?

In this weeks Westpac Weekly Commentary  – Westpac’s Economist  suggests those looking to fix may wish to wait a few weeks as rates have been falling recently and may fall further.

Fixed mortgage rates have been falling recently, and may have further to fall in the weeks ahead. Those looking to fix
their mortgage might find it is worth waiting a few weeks for better rates.

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 deal for borrowers with a deposit of 20% or more is the two-year term, which offers
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. Four- and five-year rates seem rather high
relative to where we think shorter-term rates are going to go over the coming four or five years, but they do offer stability.

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