CBA today announced the lowest 5 year fixed rate home loan EVER ( 4.99 o/o ). You watch the news and papers over the next few days – they’ll focus on the fact that it’s never been this low. There will be commentators warning that you better jump in before interest rates start to RISE. Really ??. Whilst interest rates are at historically low rates – SO WHAT ? Let’s put this into context – Most of us are currently enjoying rates on our home loan of around 5 % ( if you are paying more – time for us to have a look at your home loan……… ), but let’s compare that to the rest of the world. The United States are sitting on 0.5 % ( that’s half of one percent ) – ( yes – that’s right – one tenth of what we are paying ). Most of Europe is the same and Japan is actually negative – yes – negative – they pay you between 0.5 + 1.0 % to borrow money ). A bank paying you to borrow !!!!! Look up that in your Keynsian economic text book. The reality is we are still one of the highest ( interest ) paying economies in the world and there is a school of thought that suggests we haven’t yet seen the bottom of the cycle. Either way – the rule remains – a bank that is prepared to lend you money at a fixed rate is either : a) stupid or b) calculating that the rate over that fixed period will be lower than what they are charging…… Yes – lower than 4.99 %. Interesting times.