QUESTION: Our current mortgage debt is $485,000. I have been offered what I believe to be an excellent mortgage rate of 4.75 per cent fixed for two years. My current variable rate loan is 5.3 per cent per annum. Should I fix my home loan or hope that rates continue to fall? Should I also consider switching the loan from interest only to principal and interest? ANSWER: "To fix or not to fix" that is the question! As a general principle, you should only consider fixing a home loan in the following situations: fixed rates are lower than variable rates; your family's cashflow is tight and your mortgage is of a size that if interest rates were to move, they would significantly impede your ability to service your debt; you are of the opinion that interest rates are likely to rise in the future; or you want the certainty of knowing what your mortgage costs will be.