Fixed interest rate or floating?

The value of mortgages on floating rates continues to increase. In September there was $67 billion of mortgage debt on the floating rate, compared to $37 billion a year ago - an 81% increase. Since September 2008 there has been a 220% increase.

Experts believe the two-year rate is of better value than floating with a difference of less than 0.5% between the two rates. This means it would only take two or three 0.25% increases by the Reserve Bank next year for the two-year rate to be of great value.

However with the Reserve Bank not predicted to lift rates till next March, most borrowers appear comfortable staying floating and benefiting from low rates for a little longer.