Hi bingus,I'm not one of the intelligent ones but I'll give it a...

Hi bingus,

I'm not one of the intelligent ones but I'll give it a go.

Interest rates look like they are heading up in the near future for various reasons. Some are predicting around 10% to 11% in three to four years time. That's an increase of over 50% which means repayments on a mortgage will be somewhat felt by those with a large amount outstanding. I don't know your financial situation and how much debt you have but if you chose to fix your loan then you must budget and prepare yourself accordingly for when the fixed rate is over, because when it is you will surely be entering in to a higher interest rate environment. Banks and the like want their customers to fix their loans as it provides them with more profit, believe it or not. This is because when you're on a fixed term you can only make limited extra repayments per annum as compared to a variable loan where you can pay off as much as you want at any time. Hence fixed terms allow the banks to have loans out to their customers for a longer term.......more money for them.

So, if you want the freedom of extra repayments on your loan then I would leave it at the variable rate. If you will only be paying off the minimum amount and have no ambitions of putting in a little extra, then fix it. But make sure you budget for when the fixed rate ends.

The choice ultimately is up to you and your financial situation.

I hope I haven't confused you.

All the best.