Interest rates have been at record lows for most of 2016, after the Reserve Bank of Australia cut the official cash rate twice this year, bringing the rate down to just 1.5%.

Australia’s Big Four—Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), and Westpac Banking Corp (WBC)—are offering standard variable mortgage interest rates of around 5%.

Not low enough? Several smaller lenders, including subsidiaries of the big banks, are offering rates that dip below 4%.

The challenge for borrowers is projecting what interest rates will be like in a year, two years’, or three years’ time. To obtain greater certainty, lenders do offer fixed-rate mortgages, although the interest rates are often slightly higher than variable rates.

The second biggest challenge borrowers face is the difficulty of obtaining a fixed-rate loan for a period longer than 5 years. That’s because banks take on the risk of interest rates rising and need to factor that into the prices they’ll charge the borrowers. Just four lenders offer fixed rate loans for 10 or 12 years, including Westpac, ANZ, Newcastle Permanent, and RAMS. (The lowest rate borrowers can get is 5.86% from RAMS.)

ANZ’s fixed-rate investment loan for 10 years carries a 7.24% interest rate. Choosing this 10-year fixed loan only makes financial sense if you think interest rates will rise well above 7.24% within the next 10 years without budging.  

Taking out a three, four, or five year fixed loan makes sense if you believe that interest rates will rise. Several lenders are offering fixed rates over these periods with interest rates of under 4%. Borrowers should also consider lenders that offer combination fixed and variable loans, which might suit their budgets better.