The age old question - To fix or not to fix. Interest rates are currently at an all time low and the demand for locking in rates has been increasing. The RBA cash rate is currently at an historical low and is a long way from the rate in January of 1990 when it was 17.50%, imagine having a business loan rate of 23% today!

We have no crystal ball and can only present facts as they are today, after all in July 2008 economists were tipping the RBA cash rate was going to break through 8% towards the end of that year and then a little thing called the GFC hit which saw rates over a 6 month period plummet by 4.25%.

Alot of people locked in rates based on this information at the time and missed out on some big interest savings. However simple maths says we are not experience another major plummet like the one during the GFC, after all the current RBA rate is 2.00% so doesn't have much room to go too much lower.

Before locking in your interest rate you should consider your personal circumstances and what your plans and goals are over the period you are considering locking in for. Fixed rates generally have break costs involved so, if you are selling your property during the fixed term, maybe reconsider the term to match in with your plans.

If you are unsure about what you think rates will do, you could consider hedging your bets and fix in half your debt and keep the other half variable. Other people are trying to pay down debt as quickly as possible but still want to protect against rate moves and generally once fixed you are limited to the amount you are able to repay above your normal payments each year. A suggestion here is to consider realistically how much extra you will pay off the principal over the fixed period and leave this amount on variable so you are able to pay off your loan more quickly without penalties, but still have protection on the rest of your core debt.

To fix in or not to fix in is a personal choice and one you should think carefully about before committing to a course of action.