The fixed-rate trap
You might be tempted to lock in a low interest rate for a couple of years so that you can have the peace of mind that comes with always knowing what your repayments will be.
In my experience over the term of your loan you are very unlikely to be better off fixing your rates. You might win in the short term, but the odds are against you.
Key Point: The danger here, though, is that you may be missing out on other important features, particularly the ability to make extra repayments or repay the loan early without a substantial penalty.
I’ll talk more about my reasoning behind this and the decision between fixed and variable rates, particularly as it relates to our goal of becoming mortgage free faster, in an upcoming post.