Fixed rates still cheaper than variable

Citibank's Aaron Milburn said now might be the most opportune time for borrowers to lock in a fixed mortgage rate. Milburn said even if the RBA continues to cut rates in the new year, no-one is expecting a cut of the magnitude that has been seen recently in fixed rates. Borrowers wanting “to budget and want more certainty in their finances, then it would make sense to consider fixing rates for 12, 24 or even 36 months,” he said.

The differential between Citibank's variable rate is over 50 basis points when compared with its 3-year rate. Milburn said its 60-day rate lock feature was more important as fixed rates plumb new lows.

Source: Australian Broker News