This is a very common question at the moment given the current turbulence in financial markets. Whilst this is an individual choice, there are a couple of key points to consider:
- Don’t fix your loan for too long if you think there may be a chance you could sell or pay the loan out early – you could incur substantial pre-payment costs otherwise
- All line of credit options or ‘cash reserves’ must be variable interest
- Some lenders allow you to fix any portion of drawn funds at any time
- Many lenders allow you to ‘split’ your loan into fixed AND variable portions so that you can effectively hedge your risk
If are unsure if you are making the right decision with your loan structure and would like some help, go here.