Economists are predicting as many as three interest rate cuts over the next 6 months, but it appears that has not had an affect on borrowers who are already locking in their repayments at fixed rates.

Borrowing figures from November indicate an increase in fixed loans from 10.6 per cent of new housing loans before the November cut to 11.1 per cent, this is the highest since the financial crisis in 2008.

Australian Finance Group (AFG) reported that 19.2 per cent of their loans were fixed, up from 8.2 percent from the previous six months.

It’s a commonly asked question, whether to lock in a fixed rate or play out the current market conditions. Everyone’s situation is different and it is difficult to determinate exactly what is the best decision for each individuals loan. Locking in your repayments at fixed rates means you have the security of knowing your repayments won’t change if interest rates increase. The down side to this is when rates drop to rates lower than what you have locked in.  If you are considering fixing your home loan but don’t know when to make the move, the lowest fixed home loan rates are generally available when variable interest rates are between three and nine months off hitting their bottom.

Be aware, with fixed home loan rates as you are likely to be liable for hefty exit fees if you pay the loan out before the end of the fixed rate period.

If you are thinking of locking in your interest rates, it’s a good idea to do your own research and speak to a financial adviser who can help you determine the best outcome for your individual situation.