The time to fix is now

By www.theadviser.com.au Jessica Darnbrough, 10 September 2010

Fixed rates are officially back en vogue, with analysts predicting an upswing in demand over the coming months.

BIS Shrapnel’s managing director Robert Mellor said the time to lock in a fixed rate is now. “Fixed rates are currently very reasonably priced. Lenders have seen that there is a market there and they are slashing their rates accordingly,” he said.

When discussing which fixed rates offered borrowers the greatest bang for their buck, Mr Mellor said a five year fixed rate was definitely better than a three year rate.

“If a borrower locked in a three year fixed rate, they will find themselves looking for a variable rate when interest rates are climbing back towards historic highs,” he said.

But despite his comments, many lenders continue to promote three fixed rate products.