To Be ‘Fixed’ Or Not To Be ‘Fixed’. There isn’t a right or wrong answer to this one. No one can accurately predict which way interest rates are moving or how much they are going to move in the future, it is all about timing.
Rate Lock. If you do apply for a fixed loan, remember that the ‘fixed’ rate is not actually fixed until settlement. In the event that a rate rise occurred between the time you submitted your loan application and when the property settlement occurred, you would be charged the new increased rate. If you want to prevent this from occurring, you could apply for a ‘rate lock’ when you submit your loan application. However, a rate lock is generally only available from the larger lenders. You will have to pay a rate lock fee if you wish to have the comfort of knowing that the rate will be the same when settlement occurs.
Split Loan. If you are still undecided on whether to fix or not to fix, perhaps you may consider taking a product with a split loan whereby you can have part of the loan fixed and the remainder as a variable loan.