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Jeffrey Hutton is a Morningstar contributor.

In the lead up to the great monetary unwinding from the Reserve Bank of Australia (RBA) in 2008 that saw the cash rate more than halved in five months, 37 per cent of mortgage holders held fixed-rate home loans.

Burned and frustrated at missing out on the bonanza, many switched to variable rates when the terms lapsed. But is it time to rethink fixed mortgages? Market watchers say that it is.

So why should things be different this time? Because lending competition and expectations for rate cuts are combining to yield some attractive deals.

In 2007, the worry was that rates would rise to cool off economies at home and overseas. Today, the opposite is true - and that's when banks are keenest to lock in customers.

"In general, over a cycle of three to four years, borrowers are usually better off getting a variable rate home loan because they are less risky," says Damian Smith, chief executive of RateCity.

"Occasionally, a brief window opens when fixed-term mortgages are worthy of consideration. Now is one of those times."

Ahead of the RBA board meeting on Tuesday, bond yields reflect a market unworried about inflation and expecting more liquidity.

The yield on one-year government bonds were recently trading at 3.93 per cent, compared with a cash rate of 4.75 per cent. Notes maturing in 2014 had a yield of 3.8 per cent. Debt maturing in 10 years is trading at a yield of 4.39 per cent, down from its 12-month peak of 5.75 per cent in early February.

"That's not normal," says Morningstar head of equities strategy Ross Bird, saying long-term debt usually trades at a yield above the cash rate.

"The market is expecting, in the short term, for rates to fall."

Morningstar expects the RBA to leave rates on hold for the rest of the year, although if there is any move, it will be one 25-basis-point cut, Bird says.

In part, the yields reflect a flight to safety. The United States and economies in Europe, especially Greece, appeared close to defaulting on their loans in recent weeks and months. Standard & Poor's downgrade of ability on the part of the US to repay debt only added to the appeal of safer-seeming assets, Bird says.

Investment banks including UBS, Citi and Morgan Stanley have pared back their expectations for world economic growth, which will rely more on emerging markets such as China and India.

The upshot for the 36 per cent of Australian households that are paying down a mortgage is that fixed rates are in some cases much lower than the standard variable rate.

One example? Credit Union of Australia (CUA) is offering a three-year fixed rate of 6.39 per cent versus the average standard variable rate of 7.3 per cent.

To be sure, RateCity says it doesn't expect a rate cut from Tuesday's meeting. And if the RBA wanted to inject liquidity into the economy, it's unlikely it will be at the same magnitude of 2008 and 2009 when the cash rate went from 7.25 per cent to 3 per cent.