In this day and age, where the world is going through unprecedented changes and inflation is going through the roof, a lot of homeowners are asking themselves whether they should fix their mortgage or not. If you're one of these people, you're not alone.
First, let's talk about fixed rates. For the last three or four years, fixed rates have been cheaper than variable rates. However, in the current market, where the world is going through a lot of turmoil, banks are offering fixed rates that are higher than variable rates. This means that if you want to fix your mortgage, you'll have to pay a premium for it.
The key concept to keep in mind when considering fixed rates is how much you value certainty. If you want to know your exact repayment for a period of time, then fixing your mortgage might be the right choice for you. However, if you're trying to pick the top or bottom of the market, it's very difficult to do so in the current environment.
The best times to consider fixed rates are if you're worried about your mortgage repayment or if there's a big change on the horizon in your personal financial circumstances. For example, if you're starting a new business and you're not sure how much you're going to earn, fixing your mortgage might give you some peace of mind. Similarly, if you're starting a family and you're not sure about your future financial situation, fixing your mortgage might be a good idea.
In conclusion, when it comes to fixed rates vs variable rates, it's important to focus on yourself and your personal circumstances rather than trying to predict where the market is going. If you value certainty and want to know your exact repayment for a period of time, then fixing your mortgage might be the right choice for you. However, if you're comfortable with some uncertainty and are confident in your ability to manage your finances, a variable rate might be a better option.
Remember, everyone's financial situation is different, and what works for one person might not work for another. If you're not sure which option is best for you, it's always a good idea to speak to a mortgage broker who can provide you with expert advice based on your individual circumstances.