Hey guys, just looking for some thoughts on my current situation regarding my home loan. Im currently 1 year in on a 3 year fixed rate. Now my fixed rate is set @ 7.69%. With all this talk of interest rates falling to 5% by christmas has got me thinking wether or not im going to be caught out with my rate set @ 7.69%. Now reading threw my Bank Documents this is what it has to say on re Break Costs -
If all or any part of the fixed rate loan is converted to a variable rate during the fixed rate period, you may be liable for Break costs. Break costs are the amount calculated by us as being our costs and loss as a result of the loan or any part of it being repaid early during the fixed rate period.
Now say for instance I decided to change from my fixed rate to a variable rate (and I had the perception that interest rates were going to continue to fall under my current rate of 7.69%) I assume I would be better off breaking the contract while the banks current variable interest rate is above my fixed rate (which is currently @ 7.94%) then say in a few months time where the interest rate could be 1 or 2 % underneth my fixed rate which would therefore allow the bank to calculate a larger break cost that id have to pay?