Is it time to fix?

On an IO investment loan I have I'm on 3.04% variable. Can fix now at 2.44% (2 or 3 years).

Thinking I'll fix. How low can fixed rates go? Do people here know what average margins banks need to operate? Rough thought was 2%+. Where are they funding at, like 20bps?

Also it means they'd have to lower their variable rate by 60bps from here. I've already fixed about 60% of my borrowing around these levels, just feel like fixing more and saving 60bps off variable. Thoughts?

 

How much to fix depends on your situation, we don't have enough info to make such judgement.

Example- if you have an owner occupied loan thats not 100% offsetted then you would consider fixing this investment loan 100%.

 

The underling funding mechanisms for both fixed and variable rates are effectively at 0%. The government has stated clearly that they're reluctant to go into negative interest rates. This would suggest that rates are very close to the bottom at the moment. Most movement is going to be fairly minor to get an advantage over other lenders.

Of course if my statement about the government being unwilling to go to negative rates is false, then rates could drop further...