Westpac says fixing interest rates is likely to prove better value than floating over the next couple of years.
In its weekly commentary, released this morning, the bank's economists said: “Fixed-term rates out to two years are currently below floating rates, while three-year and longer fixed rates are only slightly higher.”
They said floating would only be the best option if the Reserve Bank was to cut the Official Cash Rate.
“While that’s a risk, our central view remains that the OCR will stay on hold for now, and increase steadily starting in the second half of next year.”
Governor Graeme Wheeler last week indicated that he still expects the next move in the OCR to be up, although not until 2014.