Hi Scott,
I am really scared about where interest rates are heading. My husband and I bought a $780,000 ‘fixer-upper’ last year not too far from where you live! We took a pay cut to do the tree change but we have been hit with successive rate rises. Now I am reading that the government is predicting that inflation will go to 5%. We could be hit with multiple interest rate rises this year, which could send us into recession. I am really worried. We can’t afford any more rate rises so should we fix our home loan now?
Ellie
Ellie,
Good news: if the government is predicting inflation will hit 5%, they will almost certainly be wrong.
(They are wrong about most things.)
My standard suggestion is to find the cheapest variable home loan you can with an offset account, and go hammer and tongs at paying it down. This works whether rates go up or down. Get the banker off your back as fast as possible.
That said, it sounds like you’ve got a few too many undies swinging from the Hills Hoist. If you need certainty right now, talk to your lender about fixing part of your loan. Just know you’ll likely pay a premium for it.
Finally, are we heading into a recession?
Honestly, I have no idea.
But it sounds like you’re already experiencing one.
Plan accordingly.
