Good news on the interest rates, the medium to long term fixed rates have all dropped. It all running at pretty much the same rate now – mid sixes.
Hoping for interest rates to track back down to the 4% within a year?
Thats not a strategy. Our advice is always to seek tailor made advice. Your individual circumstances and the household budget for the coming years needs to be considered.
Fixing short is ok, however some times its not. Such as when you might not be able to cope with further increases in a year. We can get certainty by fixing some or a large potion for a longer term. However this can have other implications. Keep in mind that the bank can charge penalties for breaking early from a fixed term, even if you are selling a home.
Fixing short gives you mobility. These days banks give you an incentive to shop around every three years(most want any cash incentive paid to you, returned in the first 3 years). If you are a year away from getting past three years, there might be a build in bonus for fixing for a year instead of two.
However if you fix for a four to five year period, the cashback bonus can be trumped easily if interest rates were to head up further by more than a 1% spread over a few years.