All the talk at the moment is about how interest rates will probably rise over the next 3 years to around 10%, or so say a number of experts. Yet Westpac is still offering a 10 year fixed rate of just 7.5%. A great deal if those rates do go up ! What do you guys think [?]
There is no turning back.
http://www.foilbiz.comI think only morons and fortune tellers would predict interest rates to rise to 10% in 3 years.
I would prefer to listen to Henry Kaye…. (well that’s taking it a bit far)
Interest rates react to expectations and uncertainty. If is very difficult to forecast 3 months forward (let alone 3 years!!!)… and often 3 month forecasts are wrong.
I think you are better off variable unless:
1. You lose sleep at night worrying about potential rises; and/or
2. You have a significant debt exposure and a 1% or 2% interest rate rise would adversely impact you.Fixed rates are like buying insurance. You may pay more in the end but you are limiting the downside.
Just my 2 cents.
Cheers
Stu
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