Variable rate mortgage holders have it better off than fixed rate mortgage holders in the long term, a new analysis has revealed.
Research done by comparison website RateCity.com.au found that during the past 20 years, variable rate borrowers were better off 63% of the time than those who fixed their rate.
However, Peter Arnold, data insights director at RateCity said there is no better time than now to opt for fixed rates, despite what history says.
“It is always a gamble when you're choosing between fixed and variable. While there is still another rate cut on the cards banks have typically factored this in already into their fixed rate pricing so they are nearing the bottom of the market,” he said.
“There is a fixed rate war being waged at the pointy end of the market with some lenders dropping their three-year fixed rates to 3.67% and their five year fixed rates to as low as 3.99% – that's fixed until mid-2021.
“About a year ago a rate under 4% was a rarity, now we are seeing five-year fixed rates under 4% which is something we've never seen before.”
More than 100 variable home loan rates and180 fixed rates have been cut since early June, despite no change to the cash rate, according to RateCity.