Suggestion to fix for longer

I don't normally give much weight to what brokers say, but I agree re long term rates.

If you look at the 10 year interbank rate, it's currently about +0.8%. the 2 year rate is about 0, and the 1 year rate is still negative. In effect banks are making more profit on short term fixed than they are on long term fixed. They argue that it allows them to 'lock-in' customers and they make the money in the long term.

There is a chance of more price pressure on Mortgage rates in the new year, tightening margins further on the 2 and 3 year fixed rates, but unless we see a 2 year rate under 2.2%, a 10 year rate at 2.9% is 'better value' looking at market rates.

Of course it's important to select a bank that allows an amount of early repayment should your circumstances change over the 10 years.
 
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