Now may be the time to lock it in: Historically low rates and ‘fixing’ your mortgage

The Reserve Bank of Australia has made history by moving our cash rate to an all-time-low of 2%. Should this cash rate cut be passed on in full by  financial institutions, it could save a borrower with a $300,000 mortgage around $47.00 per month in repayments. If you’re an investor looking to begin or grow your portfolio, there truly is no time like the present to go ahead and buy that property you’ve been meditating over. If you are already a mortgagee, now is also a critical moment to take stock: do your current mortgage terms and conditions reflect current economic trends and (more importantly) your own financial position? You may be best served by refinancing and opting to ‘fix’ your mortgage interest rate, capitalising on the ultra-low cash rate to your benefit.

Without a doubt, our current cash rate is at an unprecedented low – money is unlikely to be ‘cheaper’ to come by or loan. Consider ‘locking in’ your interest rate now and you’ll enjoy multiple benefits: budgeting will become easier as you’ll know exactly what your mortgage repayments will be, regardless of any rate rises. Another option is to fix a portion of your loan – many investors choose to keep 50% of their loan fixed and 50% variable, capitalising on the stability of ultra-low rates while retaining the ability to make additional loan repayments on a portion of their debt. Although no one can accurately predict how interest rates will move, should you be happy to make repayments on a fixed loan at the incredibly competitive rates currently offered by many lenders – now is the time to act!