Fixing the interest is making the bet - "For the given time, I bet that interest rates will rise above what I'm fixing" but the condition of the 'win' is that the variable rate has to be higher than your fixed rate long enough to make the $$ balance out.
Personally, I'd only fix if I was sure (as you can be ) the variable rate will get to be higher than your fixed rate sooner rather than later, otherwise you risk breaking-even, or worse.
i'm confused as what to do also! we are kinda already pushing the limits of our weekly budget and its only gonna go up from here! i think fixing it at least means security in budgeting.
We bought our place 2 years ago and fixed for 3 years at 7.28%. At the time interest rates were going up, and so by fixing we missed that spike which we were pretty stoked with.
When they came right back down we went back and looked into remorgtaging and it was going to cost us 6k, so we've left it. We only have 12 months at our fixed rate left... lets hope we don't get hit with a high variable! In the perfect world we'll get a smaller interest rate, fix at that, and keep paying at 7.28% - i did say the perfect world though
It's all a big gamble! Do what your comfy with, ask your lender LOADS of questions... even if you think they're stupid, ask them anyway.
) the variable rate will get to be higher than your fixed rate sooner rather than later, otherwise you risk breaking-even, or worse.
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