If you believe the RBA that interest rates are on hold until 2024, you might be better off having a variable home loan. Of course, it depends on what rate you’re on now, whether you’ll stay in your home longer than a fixed rate home loan, and a whole lot of things related to your personal situation.

Clearly, this isn’t financial advice for you because I don’t know your personal goals, appetite for risk and circumstances. But I am giving you a heads up.

However, if you want to know (not hope) that your monthly repayments will stay the same, perhaps you should think about fixing for as long as possible.

But remember, the longer you fix, it’s likely you’ll pay a higher interest rate on your loan. And don’t be fooled by the headline or advertised rate. I’ve just looked at one really low rate on the Canstar comparison website that’s advertised as 1.98%. But when you add in fees and other slugs, it has a comparison rate of 3.56%!

This loan has a $2,000 cashback offer but they get even with their borrowers over time!

Also remember in second guessing where interest rates will go, you’re trying to beat the banks! Bankers are trained to understand the money market better than most and they’re pretty good at beating their customers too.

That’s a point that Mark Bouris (founder of Wizard Home Loans and Yellow Brick Road) has made clear to me over the years, when we’ve speculated about fixed or variable home loans.

Interestingly, I’m now not alone tipping it will be hard for the RBA to keep the official cash rate at 0.1% until 2024. ANZ’s economic team is thinking we’ll see two rises in 2023. So these current low rates have a use-by date.

If I was doing my ‘fix now or not’ numbers, I’d work on a 0.5% rise from 2023, probably coming in 0.25% rises. History says when inflation shocks the RBA, it can go for a 0.5% rise. But given all their implied ‘promises’ about no rises until 2024, I think they’d be scared to try 0.5% rises.

History also says that the RBA will go for three rises in fairly quick succession to make a point to borrowers that it’s keen to slow things down. So once they start, we could see another rise early in 2024, which at least would be consistent with their ‘promises’ on when rate rises should start.

The reason why fixed rates are set to rise is the end of the Term Lending Facility from the RBA, which gave the banks cheap money. This was an RBA-Government deal to help the economy rebound out of the Coronavirus stock market crash and recession.

$200 billion was provided to the banks at 0.1%, which is why we saw four-year fixed rates under 2%. But as this money disappears, banks will have to go to the money market here and overseas to borrow money. And they will pay more than 0.1%!

At one stage, the AFR says “there were as many as 32 lenders offering four-year fixed rates below 2 per cent at the start of 2021, including Commonwealth Bank, NAB and Westpac.”

Right now you can find 3-year rates at 1.85% but the comparison rate is 2.24% or higher. Bank Australia has a 1.59% fixed home loan but the comparison rate is 3.06%, though the monthly repayments are low.

If you opt for a fixed rate loan, make sure there isn’t a big gap between the advertised rate and the comparison rate, just to play it safe.

My perusal of the comparison websites UBank seems to be the best benchmark to compare loans. But this is an online lender.

When it comes to variable home loans, FreedomLend has a 1.97% home loan with a comparison rate of 1.97%, meaning no extra ‘tricky’ charges.

Remember to look at the comparison rate and if it’s a lot bigger than the advertised rate, then look at the monthly repayments and ask: why the difference?

Your investment into your home is probably the biggest money play of your life, so do your homework, find the best deal you can get off these comparison websites and then take it to your bank/lender to see if they’ll match it.

Also, once you’re more informed about loans and what you can get by yourself, see if a mortgage broker can get you a better deal.

As I always say, anything worth doing is worth doing for money!