Taking a "reasonable stab" at where fixed rates will be in one, two or three years time is not possible at the moment and this needs to be recognised, he says.
"That means it would be risky to base one's decision upon what to do at the moment on someone's forecast of where things will go in the future. Just because we called it right with regard to catching the low-point for fixed rates in March does not mean we can reasonably say where those rates will be while the global crisis continues to unfold."
Believing floating rates are unlikely to fall further, Alexander currently favours fixing for 18 months and using the freed up cash flow to reduce principal "as much as humanly possible" over the next year and a half. At 7.45%, fixing for three years now means paying too much of a premium above floating, he says.
Alexander expects the Official Cash Rate to rise to 5.75% by the end of 2011, from its existing level of 2.5% and that floating and fixed rates out to 18 months will rise by about 3% between now and the end of 2011.
