Fixed rates offer security against rising interest rates!

You can manage your household budget better during the fixed period by knowing exactly how much is needed to repay your home loan.

Fixed Rate Loan

  • Fixed interest rate loans generally have similar features and flexibility of a variable loan. However, the interest rate is locked in for usually one to five years and does not vary within the fixed term period.
  • Your regular repayments stay the same regardless of changes in interest rates
  • If interest rates rise then the advantage is your rate stays the same and you could be saving money.
  • If interest rates go down, you don’t benefit from the decrease. Your regular repayments stay the same.
  • It is possible to exit out of a fixed rate but sometimes there can penalties involved which generally cover any shortfall or losses the lender may incur from the transaction.
  • A fixed rate option is usually available again at the end of the fixed period and can be beneficial dependant on what rate lenders are offering or you can change to a variable loan.
  • There is very limited opportunity for additional repayments during the fixed rate period.
  • You may be penalised financially if you exit the loan before the end of the rate period.

Leave a Reply

Your email address will not be published. Required fields are marked *