Have you missed the boat to fix your home loan?

Home loan interest rates are on the rise. With the Reserve Bank raising the cash rates twice in recent months, bank's have increased variable home loan interest rates on multiple occasions, which has increased the minimum home loan repayments required on a variable home loan.

For many people who have established a home loan in the last 10 years, these home owners have not experienced what it is like to have their home loan rate increase, let alone to have to contribute more by way of repayments to their home loan each month.

It can indeed be very daunting, especially when it feels like the cost of living is increasing on all sides.

The question then arises. Is it now too late to fix your home loan? Have you missed the boat?

The reality is that gone are the days where home loan customers could secure a 2% fixed rate. Some lucky home owners were even able to secure a rate of 1.89% in the last few years. Instead,

• The best 1 year fixed rate now sits between 4.20% and 4.50%

• The best 2 year fixed rate now sits at 4.80%.

• The best 3 year fixed rate is above 5%.

So for home loan customers who are currently sitting at variable rate (albeit a rising one) between 2% and 3%), the question becomes whether the gap to secure a fixed rate is now too big to take the leap.

Fixing at a higher rate will give certainty in repayments regardless of what happens with interest rates. It will however require you to pay higher repayments than what you are now. There are important differences between what you can and can't do on a variable rate loan as compared to a fixed home loan.

With many banks currently having cash back offers for refinanced home loans, instead some customers are looking to these bonuses as a way to build up a buffer to protect themselves, as their variable rates rise. The largest cash back currently available is $4k.

The constant changes in interest rates is forcing home loan customers to make choices about what is best for them and their family. It requires actions to be taken now to combat what is quickly coming.

What are you going to do?