Okay so it’s time to review your home loan, now I believe we should be doing this every 12 months regardless of the current conditions right now. As you all know we are experiencing record low interest rates at present but I’ve got good news that there’s going to be a further two rate cuts this year by the RBA. Now whether bank’s pass that on who knows however Bankwest today have come out and slashed their fixed principal and interest rate for five years by one point two five percent. I think now that’s not an endorsement by Bankwest by any means but it shows you that rates aren’t going anywhere soon but it also shows you that the environment is very competitive to go and ask for a better deal.
Right so the first thing I’d recommend is go back to the bank or banks that you’ve got now with your loans and say “What can you do for me right now”. If the answer is nothing, great that’s the first step, if the answer is we can knock something off it then your jobs done. If they’re saying we can’t do anything then the next step is go to your broker and ask them to check across 20 or 30 lenders and see what’s trending right now. Now yes there is paperwork and a small fee maybe to transact across but in the long run you’ve got to do the maths to see what’s going to be a little bit beneficial. Again short term pain, long term gain. So the next 12 months two years I personally don’t see rates increasing so from a variable to fixed perspective I would be looking at variable only unless we want certainty in our life. However, maybe we’re dropping in income or there’s job uncertainty or something like that, then fixed is a solid option so at least you know what you’re up for. But understanding that if the variable rates are going south and not north then you’ll benefit from that as opposed to having it fixed where that’s what it is.