Fixed rate home loans are popular among Australians as they can provide certainty around home loan repayments
With the interest rate remaining standard for a set period of time usually one to five years, this type of loan offers security and regularity to the borrower, allowing ones repayments to stay the same. At the completion of the fixed term, the borrower has the option to set another fixed term for that particular loan or change it to a standard variable or split loan.
Whilst the advantages of a fixed rate home loan are that the repayment amount does not changes there are some things to be aware of. If you pay off a fixed rate home loan prior to the expiration of the fixed period you may incur a break fee, this generally happens where the variable rate has fallen below the fixed interest rate. Whilst you generally have the choice to do this it does mean that you may be limited in your options if you wish to refinance at a later date or access existing equity in your home.
The Finance Site helps you to find out lowest fixed rate home loans using our product comparison tool. For more information visit – home loan interest rates.