However, the catch is that if you fix at the current interest rate, expecting rates to rise and they drop, you are looking at paying more than you would on a variable. There are also pitfalls to watch out for with fixing your interest rate such as whether your bank will still allow you to have an offset account. Most don’t allow offset account for fixed rate mortgages, and offset accounts can be quite a valuable way to reduce your interest while keeping cash available.
Lenders do allow fixing part and keeping the remainder of your mortgage variable, thus minimising the effects of both rate increases and decreases. It is worth speaking to a mortgage broker about the pros and cons of fixed versus variable mortgages and researching which is better for your situation.
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