FIXED HOME LOAN

If you're worried about rising interest rates, then a fixed rate home loan will allow you to plan your finances and stick to your budget, because repayments will not change during the fixed period - usually between one to five years.

Advantages of a fixed rate home loan

• If the interest rate rise, your home loan repayments stay the same, as the interest rate is fixed for the duration of the agreed period

• Makes it easier for you to budget as you know exactly how much you need to repay each month so you can plan accordingly

• Some fixed rate home loans may allow you to make additional repayments during the fixed period and includes redraw facilities

• Many fixed rate home loans offer competitive interest rates

• Fixed home loans give you the flexibility to choose the term of the loan - between 1 to 5 years and sometimes even 10 years

Disadvantages of a fixed rate home loan

• Reduced flexibility, for example you cannot make extra repayments and thus shorten the duration of your home loan

• If interest rates fall, the repayments will not reduce, as the rate remains fixed

• Additional home loan repayments are limited, and exceeding these limits may incur break costs/fees

• Once the fixed rate expires, the interest rate will revert to the prevailing variable home loan interest rate

• Some fixed home loans may charge you for making early repayments

• Some mortgage lenders may charge hefty exit fees if you want to exit or refinance your home loan

Please use the online finance calculators, including the borrowing power calculator, loan repayment calculator or stamp duty fees calculator. Alternative, speak to one of the mortgage brokers at Intellichoice on 1300 55 10 45 for more information about the various home loan products we have available or whether a fixed rate home loan or a split home loan may better suit your needs and circumstances.