by Wealthyfrog www.wealthyfrog.com.au

With the threat of additional interest rates rises by the Reserve Bank the question comes to mind to fix or not to fix?

Really the answer to this question depends on your finances, the features you need in a loan, how long you plan to own the property and your expectations of interest rates in the future.  To assist you with this decision, review the below points;

§         Could you afford an interest rate rise if rates moved by 1 or 2%?

§         Advantages and disadvantages of fixing your loan

Advantages

·         Can improve stability within your budget

·         Protect against rates rises

Disadvantages

·         Fewer loan features than a variable loan

·         Break costs if paid out early

·         If you fix a rate you miss the benefits of downward movements.

§         Advantages and disadvantages of a variable loan

Disadvantages:

·         Interest rates can rise at any stage

·         Picking the next move in interest rates is very difficult

·         Negative impact on budget

Advantages:

·         Very flexible

·         Big savings when rates low

This article provides general information only without taking into account a person's objectives, financial situation or goals. Wealthyfrog are unusual in that they are completely unbiased and don't sell any investments or receive any commissions. Please contact Wealthyfrog for a complimentary session on 07 3514 7000 or visit our website on www.wealthyfrog.com.au.