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That's right, fixed rate isn't always cheaper. I as referring to long-term averages. You can beat the long-term averages with the right timing. Cheers,

It seems like we're going into circular conversations in this thread, with the same arguments re-hashed again and again. As far as I can tell, you can choose either for fixed rates if you need predictability, or for variable rates if you prefer to have more flexibility and lower rates over the...

You're assuming far too much. Banks offer fixed interest rates as long as they can make a decent profit on it. Recently long-term interest rates (ie, 10 year & 5 year bonds) have gone up. As their cost of funding goes up, banks raise their interest rates. That's it really. Cheers,

.7% discounts typically apply to variable rates. Fixed rates discounts are much smaller, usually around .2% Cheers,

a rumour? :confused: or a joke :D the banks would love it! Cheers,

Where did you that from? With 10 year government bonds above 4%, that seems unlikely. Why would you buy bank debt at 3% yield when you can get a gov bond for 4% yield? :confused:

Very true. Good post with informative graph. I didn't realise how much it had changed in 6 weeks. It depends on your timeframe. I don't see much point fixing for 3 years, as there is no big risk of super-high interest rates in the next 3 years. However, I see more value in fixing 10...

The truth is ... nobody really knows what is going to happen next. You can gather as many opinion as you wish, but in the end there is still uncertainty. It should really depend on your personal circumstances rather than on expectations of hitting the bottom. TokenFunder said it better...

The question is should you be fixing for longer than 3 years, maybe 5 or 10 years maybe?

That's not what the financial markets think. http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf The expectations indicate that variable rates will start to climb back up early next year. By the time variable rates start to rise, fixed rates will already have started to rise...

Before fixing your rates for 3 years, you might want to ask yourself what are interest rates likely to be in 3 years? Could a jump in the interest rate you pay cause you a problem then?

Did anybody notice that 10 year treasury bond rates have risen significantly since mid january? From a low of 3.86% in mid january, they have climbed to 4.37%. The government stimulus announced this week is not only inflationary, but it also increases the supply of bonds, pushing up...

Does anybody remember what banks were charging for 5 year fixed rates about 6 months ago? Back then, 5 year bond yields were about 6.5%. Now they are about 3.5%. I doubt they will go much lower than 3%. I would expect 5 year fixed rates to settle down around 3% lower than what they were in...

Yes, a 5 year fixed term contract has 'break cost', meaning that you pay a penalty for closing out the loan before the end of the term. Theses penalties can be quite high. Best not to take a 5 year fixed contract if you plan to sell the property soon. Cheers,