Fixed Rate Home Loans
Posted April 13th, 2010 and last modified August 18th, 2010If you have ever followed the movements of the official interest rates, and the predictions which come with them every month about what that movement will be you will have noticed that even the best financial analysts in Australia can’t always predict where rates are going to go on when they’re going to get there. If you want to avoid stress and worry which can come with wondering where interest rates will be on the first Tuesday of next month, then you may be perfect for a fixed rate home loan.
Featured Fixed Rate Home Loans
| Home Loan | Loan Details | Interest Rate (p.a.) | Comparison Rate^ (p.a.) | Application Fee/Ongoing Fee | Max LVR | Min & Max Borrowings | |
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Enjoy certainty in your repayments | 7.99% | 7.71% |
$600.00/ $8.00 |
80% | $20,000 /$1,000,000 |
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Keep your repayments on track with this competitive fixed rate loan | 7.35% | 6.85% |
$0.00/ $0.00 |
90% | $100,000 /$2,000,000 |
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MyRates Premium Offset Loan | 7.23% |
$0.00/ $0.00 |
80% | $100,000 /$2,000,000 |
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One of the best fixed rates available | 7.84% | 7.71% | $395.00 | 80% | $10,000 /$1,000,000 |
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A competitive rate from a world class provider | 7.44% | 7.51% |
$600.00/ $8.00 |
80% | $20,000 /$1,000,000 |
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Features Of A Fixed Rate Home Loan
A fixed interest rate option and term can be offered on a range of different home loans, and it is up to you to find the best loan with the best fixed rate and the best features for you. However to help you compare fixed interest rate home loan offers so you can make informed comparisons, considered the features you can expect from a fixed rate home loan:
- You interest rate will stay the same in the midst of official rate movements. If the Reserve Bank of Australia raises the official cash rate and your lender follows suit, if you have a fixed-rate home loan your interest rate and your repayments will stay the same.
- You interest rate is fixed for a certain term. You cannot choose a fixed rate home loan where the rate will stay the same over the entire 30 year term. Instead you will normally have the choice of a fixed rate term from one year up to 10 years, depending on the lender and the loan.
- You may not be allowed to make additional repayments. In fixing the interest rate on your home loan some lenders were also fix your repayments and so if you have extra funds to contribute to your home loan during your fixed-rate period then you may not be able to, or you may be charged to make these additional repayments.
- A fixed rate home loan can be expensive to refinance. Before you choose a fixed rate term for your home loan interest-rate make sure that your loan suits you now and into the future until the end of your fixed-rate period. If you break a fixed interest rate period on your home loan you can be in for expensive exit fees, sometimes up to as much as $30,000 so make very sure that fixing your home loan interest-rate is the right choice.
How To Decide If You Are Suited To A Fixed Rate Home Loan
If the features of a fixed interest rate appeal to you then you may be suited to the ease and reliability of a fixed rate home loan. A fixed rate loan may particularly suit if you:
- Are a first home buyer. If you are a first home buyer then you probably have a long savings road ahead of you to reach the deposit you need to buy your home. As a result once your loan has settled and you are in your new home you are likely to have very few cash reserves as you have diverted them all to making a deposit payment. Therefore a fixed rate term on your home loan could suit you because it will give you reliability in your payments so you can budget each month while saving some funds too. Fixing your rate can also mean you are charged a lower rate since official rates are still in the rising portion of the interest-rate cycle.
- Are on a tight budget and need the same repayments each month. You may have a young family or you may have recently adjusted your lifestyle to work fewer hours and so it is very important that your budget remains on track and set interest rates and set repayments can help with this.
- If you are the type of person who needs security and reliability from their finances. If you are the type of person who always needs to be in control of every cent into the future and have all the information about the decisions you are making on what your finances are doing then having a fixed interest rate and fixed repayments will sue you perfectly. You can budget for the exact repayment amount each month and you don’t have to wait with bated breath for the announcement from the RBA.
If you want to be able to relax and enjoy the security of owning your own home once you have made it through the loan application process then you may choose the reliability of a fixed-rate home loan. For more information about the features which are common to fixed-rate home loans contact us now.
