Case Study: “I can’t decide which fixed rate to choose?!”
- TheLendingTeam
- May 28
- 2 min read
Can't decide which fixed rate to lock in? Uncomfortable with your entire home loan being fixed over one term? This could be a suitable option.
Our clients home loan ~$700,000 had a fixed rate (5.99%) up for renewal in May 2025.
Interest rates had decreased since they refinanced the year before however, our clients were nervous when deciding how long to refix for due to the uncertainty in the interest rate market.
After discussing their personal circumstances and goals with their adviser, they were conflicted whether they should refix for 1 or 2 years as recommended to them by their adviser. Their main concern was they had experienced the sharp interest rate hikes post COVID which resulted in their entire home loan going from 3 to 6% and they did not want to be in this position again.
To help spread the risk associated with refixing their entire home loan at one fixed term rate, their adviser said an option to consider would be splitting their home loan into 2 or more smaller loans and refixing at different fixed terms. This meant their entire home loan would not refix all at the same time.
After discussing the different options further, our clients decided to restructure their home loan into two equal loans of $350,000 then refix one for 1 year and the other for 2 years.
Our advisers stay informed with the latest market updates and trends including economic predictions however, there is no crystal ball for predicting what the market or interest rates will do. Hence when deciding on your home loan structure it must be one you’re comfortable with based on your goals, plans and risk profile.
There is no one size fits all when it comes to loan structure as each homeowners personal goals and risk profile will influence an advisers’ recommendations. This includes splitting your home loan, there are circumstances where our advisers wouldn't recommend this strategy due to certain future plans, lending position and client preferences. This is why it's important to discuss any changes to your loan structure with your adviser.
Can't decide which fixed rate to lock in?
It's time for tailored financial advice from our team.
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