Should you re-fix at today’s interest rate or wait and see?

Many people are watching interest rates climb to heights they haven’t seen before. And they’re getting a bit panicky.

Some are wondering whether to break their fixed-term loan early in order to grab a new rate now. They’re worried they’ll be caught with even higher rates in the next year or two.

Our advice is: Tread very carefully.

For a start, you may incur costs if you break your current loan, because the bank is entitled to claw back revenue it was expecting when you committed to the fixed term. In a rising interest rate market that’s increasingly unlikely but we never know until the bank has quoted.

But there’s an even more important reason to pause. We don’t actually know how high rates will go and when the cycle will turn. And there are other relevant factors, like the size and term of your current loan, and how your mortgage is structured. 

Your situation is unique, so we’ll need to run the numbers to work out whether it’s worth breaking your fix early.

We are always happy to look into your loan and give guidance on whether to refix or wait things out. It’s a personal decision and there’s no ‘one size fits all’ solution. Interest rate trends are only part of the picture.

Don’t jump the gun. Talk to us.