WITHOUT FEAR OR FAVOUR – The case for and against to fix for 5 years.


Without a doubt, the best 5-year fixed interest rate is Newcastle Permanent Building Society’s 1.99%. Also, they rate highly in our lender ratings with a score a TCSL of 96/100. Visit creditbroker.com.au.

It compelled us to number crunch and calculate the net present value / break-even rate for each month over a 5-year term, compared to say a variable interest rate of 2.59%. i.e., how much lower variable rates must be cut to break even.

As the chart shows, the Reserve Bank must dare to experiment with negative interest rates or gift the ADI’s with unlimited loans at 0.10% (or lower if they cut again), or both.

The case against fixing is that the Reserve Bank is now not only the lender of last resort but is also the buyer of last resort – so do you sit back and wait until the debt bubble-bubble burst.