As you will be aware the Reserve Bank put up the official cash rate to 2.75% on Thursday. This will generally have an immediate impact on mortgage floating rates by the same amount. In theory the impact will not affect the fixed rates as they had already moved in anticipation of the cash rate increase. Having said that there has been some minor movement today which seems to be the banks playing catch up.
The Reserve Bank forecast is for rates to increase 2% over the next two years, with other economists having varying opinions. It is best to plan for this as it is the “official” projection.
What to do? It comes down to the sleep test (can you sleep at night or will you worry too much?) and what makes you feel comfortable but locking in for either one, two or three years or a mixture of all, has merit.
Everybody has their own set of circumstances so do feel free to give us a bell to discuss your particular situation.