Almost every Australian finds the task of seeking out the best home loan to suit their lifestyle, a tedious one. With the ever changing market, it can be tricky to search for the best product on the market with the lowest interest rate and as many flexible parameters as possible.
More than ever, consumers are looking for safe and secure options to ensure that their financial futures are stable. Fixed Rate home loans take the guess work out of interest rate fluctuations and guarantee you one solid fact, you are always in control of your home loan.
A Fixed Rate home loan can provide you with certainty and ensure you rest assured that your interest rate will never fluctuate, regardless of what the variable rates do, for the life time of you fixed rate term. Not only does locking in your rate mean that you can be completely certain about your ongoing repayments will never change for the entire term of your fixed rate but it also allows you to have peace of mind to budget and plan for your future.
Fixed Rate home loans are based on a specific interest rate for a set term. This usually varies from 6 months to up to 10 years. Once the fixed rate term expires, the loan will revert back to the variable rate, at that time, unless you opt to fix for another term. The difference between a fixed rate and a variable rate is that the interest rate will remain the same throughout the time of the loan regardless of the changes within the market; the repayments will always remain unchanged for the life span of the fixed term. This security is a main feature when home owners need stability.
With the safety of knowing that you have a set repayment in spite of fluctuations in interest rates, fixed rates start to become very popular amongst home owners and becomes a very attractive option when variable rates start to rise. At present, almost one fifth of all home loans within Australia are fixed.
Although a fixed rate ensures that you never have to worry about your repayments changing for the entire term, it can however have its limitations. Generally, it does not allow for any additional payments to be made to the loan, which can be a fundamental issue should you wish to pay off your home loan sooner. As well as additional repayments, a redraw facility is not available for fixed rate loans.
Also be aware, with fixed rate home loans, should you wish to exit the fixed rate before the term is up, a break cost is associated and can incur hefty fees. However, while these aspects of fixed rates may seem daunting, know that if you are trying to be as secure as possible within your loan, a fixed rate will be able to provide this assurance and enable you to be in full control.
If you think this certainty is something you may need and think a fixed rate may be the way to go, do not hesitate to contact one of our esteemed lending managers who will gladly assist you and guide you into the right fixed rate loan to suit your lifestyle and pocket. Call us today on 1300 500 300 or fill in the form below to hear more about how Fixed Rate Loans can work for you.