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Are interest rates likely to rise or fall?

Yes, both!

Over the term of a normal mortgage you can expect both upward and downward movement in interest rates.

Whether interest rates are likely to rise or fall in the short term I cannot say.   The real question should be “how can I best protect myself from rising interest rates or be best positioned to take advantage if rate fall?"

This is dependent upon your circumstances; if you are looking for the safety of a known repayment over a given term then fixing the rate may be best for you. This option could restrict extra repayments and have extra costs should you want to payout or refinance earlier than the fixed term expiry.

If you want to take advantage of falling rates then a variable rate loan is the choice however if your prediction is incorrect then you will have higher repayments.

Many borrowers have a cocktail arrangement, with part fixed and part variable. They aggressively pay down the variable component whilst having the safety of a fixed rate for a part of the debt.

Call Your Local Finance mortgage broker on 1300 787 665 to discuss your options

 

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