John Symond recently spoke to the hosts of radio show Mamamia Today to answer some good questions they had about property.
Should I take my interest rate fixed or variable?
Well there are pros and cons with both. With a fixed rate you set your budget you lock away the interest rate regardless of interest rate movements, your repayment stays the same. So you’re taking out insurance.
With variable rates you are subject to movements in official rates. So whether or not rates go up or go down, so will your variable rate.
I always recommend taking a combination of fixed interest and variable. That way you fix part of your budget regardless of interest rate movements. With the variable rate you maintain all the features and flexibilities of being able to pay extra payments off your loan and redrawing for a rainy day.
So my advice is a combination, part-fixed and part-variable, and that way you get the best of both worlds.
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