TURMOIL PROVES A LESSON FOR BORROWERS

Consider the potential for the cash rate to fall before settling on a fixed-rate loan. Picture: Louise Kennerley.

A fixed-interest loan could be a burden if rates are cut amid the latest economic unrest.

If interest rates fall significantly as a result of the turmoil on world sharemarkets, home buyers who have a variable-rate loan will be a lot better off.

But if you’ve recently signed up for a fixed-rate mortgage, you could have a problem on your hands.

It’s important to take extreme care with fixed-rate borrowing. This is especially so when the interest rate outlook is uncertain.