Analysis: Homeowners wishing to refinance their mortgage are caught between a rock and a hard place: do you bite the bullet and fix at a higher rate, or try to save some cash now by opting for a temporarily lower variable rate? | domp
Recent home buyers have been told to prepare for a financial shock in the months ahead as many come off COVID-sweetened fixed-rate home loans and are faced with as much as a 50 per cent hike in their monthly mortgage repayments.
For example, a homeowner with a $750,000 loan who fixed it for two years in December 2020 at a 2.08 per cent interest rate is likely to be hit with an average revert rate of 6.68 per cent in December this year, upping their monthly repayments by $1784, or 56 per cent. This places refinancers between a rock and a hard place: do you bite the bullet and fix at a higher rate, or try to save some cash now by opting for a temporarily lower variable rate?Advertisement
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