Newspaper article The Morning Bulletin (Rockhampton, Australia)

Rates and Opportunities

Newspaper article The Morning Bulletin (Rockhampton, Australia)

Rates and Opportunities

Article excerpt

WITH interest rates at levels that we haven't seen for 50 years, the question of how to use this situation to your own advantage must be considered.

The obvious first question is "should I take a fixed-interest loan right now, or ride the variable rate roller-coaster?" This is always an interesting question and surprisingly one I get asked quite often. Unfortunately there is no simple "one-size-fits-all" answer. As frustrating as that sounds, you need to consider a number of issues.

First, whatever fixed rates are being offered in the market at the moment have already factored in the banks' estimates of what interest rates will do over the next few years.

If you look at the fixed rates currently being offered, this will give you a guide as to the future direction of variable interest rates. For example, NAB's fixed-rate home loans range from 4.89% for one year up to 5.09% for fixing for five years. This suggests that interest rates are not likely to move dramatically over the next few years but over a 10-year period the rate is 7. …

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