The investor can expect that interest rates below 4% on Cash Management Trust will be with us soon. Term Deposit rates continue to fall. It is not many months since two years at 8% plus was available, so if you are lucky enough or have planned well enough to be cashed up and can invest some of your available funds for the longer term, you should consider locking in those Term Deposit rates now.

Borrowers can expect their variable rates to continue to fall and continue to take advantage of those. However, they should be aware of the steps necessary and how long it may take for their loans to be converted to fixed loans at some time within the next twelve months.

Anyone on a fixed rate loan could be well advised to ascertain the break cost now. That cost is likely to increase as the differential between the variable rates and the fixed rate increases over the next few months. The plan would be to take a variable loan for a short period of time, then when fixed rates are set lower lock in another fixed rate period.

An analysis of the break cost and the new fee on setting the rate later are part of the determination of how much savings can be achieved.