Currently looking to refi one of my investment loans coming off of a 5 year fixed rate. The bank has offered me a rollover on the investment loan to a new fixed rate period, but I’m looking to see if I can refi it to a new lender and get a new IO period.
What’s happening with interest rates – should I lock in or potentially keep it variable? Interest rates have dropped 1% since I last locked in so I lost a bit last time so thinking of keeping it variable this time.
Fixed rates should be used as a risk mitigation tool than trying to gamble with the market. ie if you’re on a tight income and significant interest rate rises could put you under financial stress, fixed rates can give you the peace of mind for consistency of repayment. I wouldn’t try to ‘pick’ the market with interest rates – I’m pretty sure there was a study a while ago showed most people who fix their loans end up paying more than variable borrowers.