Current Rates and Fixed vs Variable

Rates were increased 0.25% to 4.75% by the RBA in November 2010 and in addition most of the major banks moved their standard variable rates up in excess of this e.g. CBA 0.45% to 7.81% and a typical margin discount was 0.6% at the time. More recently competition has seen these margin discounts increased to 0.9% so variable borrower rates are now around 6.8% p.a. for new business a reduction of 0.4% in the past 10 months. In addition, the yield curve has changed to inverse in expectation the next RBA move will be downwards. We dont know when or if for certain but it is now possible to lock in a further 0.5% reduction immediately as some fixed rates are around 6.3% for between 1 and 3 years. There are great savings to be made by refinancing and as new loans no longer have exit fees will also put you in a better position for the future.