Rising Tide Blog

Dear Rising Tide – Fixed vs variable interest rates

Posted by Sam Gawenda

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Chrissy from Bayside

“Hey Rising Tide! Hope you are well! All this talk about interest rates potentially rising on the news makes me nervous! Should we be fixing all our loans?”

Great question, Chrissy. Firstly, make sure you check out our previous blog about fixed and variable interest rates here which will help you get up to speed.

So, when is fixing the correct fix, and when is it not? It’s an intriguing question that many of us are asking now.

While we don’t have a crystal ball, the team at Rising Tide are comfortable saying that we believe variable interest rates will likely have increased by this time next year.

So, you’d think that with rates rising, the logical thing to do is fix it in – But sometimes the most logical thing to do isn’t always correct. It is important to remember when it comes to dealing with the banks, they rarely lose and often move their fixed rates to accommodate future rate rises, which we are currently seeing.

If you are looking for the comfort of knowing exactly how much each repayment will be then a fixed-rate will certainly help you sleep at night. But bear in mind, you may pay a little bit more for this comfort.

On the flip side, if you are happy to ride a few bumps, we believe there is still value in variable rates option.

Simply put, every situation is different and there is no silver bullet – it all depends on your comfort level and risk appetite. Bear that in mind when you do your research, and chances are you can’t go wrong.

If your loan has been in place for longer than two years, and it’s not currently on a fixed rate, now is the right time to review it!

And remember, if you need help with your home and investment loans, click here to chat with one of our experienced mortgage/lending specialists.