Fixed rates are generally a good indicator of which way the banks are thinking interest rates will move in the future, since banks have to set their rates to make some sort of profit during the course of a fixed rate period.  Interestingly, we’re now seeing majority of banks hiking fixed rates up, under the radar.

Commonwealth Bank (CBA) today raised their fixed rates by 0.4%, which follows a number of others in the last week or so that have done the same thing.  Many brokers are calling on their clients to act now if they’re thinking about fixing their interest rates since they look like they’re on the move…. upwards!

At the same time, another lender issued a statement today suggesting that they expect interest rates to drop by at least another 0.75% by August, later this year.  That would be 3 interest rate cuts from the RBA over the next four months.  I’m not so sure about that one, but it’s not beyond the realms of possibility. 

 Banks in Europe are suggesting the end of this ‘recession’ is in sight, and there is plenty of news going around that suggests that 2010 is going to be a good year, but I’m not convinced.  I think the worst is yet to come and we’re only experiencing the “Glenn Stevens effect” at the moment.

If you are thinking about fixing your rate, now is probably the time to do it given fixed rates are on the rise.  Yes, it’s likely that we’ll see another rate cut or two over the next six months, but the impact that is likely to have on fixed rates is minimal given the evidence we’ve got with rising fixed rates. 

If you’ve applied for a fixed rate but haven’t got yourself “locked in” to that rate, call your broker now and organise rate lock right away!  You may have already missed out!