Can you highlight the benefits of a fixed rate home loan?

Any general questions you might have in regards to loans and finance.
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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
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Re: Can you highlight the benefits of a fixed rate home loan?

Post by Otto Dargan »

Hello chapati. Welcome to the forums.

Fixed rate home loans provide insurance against interest rate rises that might put your home at risk.

Generally, fixed rate loans are not as flexible as other home loan products. Paying out early or switching may cost you significantly in break costs. However, the market is bringing out new products on home loans. Some of the fixed rate loans now offer the following features:
  • Extra payments without penalty
  • Redraw facility
  • 100% offset
  • Low or no monthly account keeping fees
  • Interest only repayments
Most Australian lenders, including several of the major banks and other lenders, are hesitant to provide extra features on fixed-rate loans. However, with the right lender, you may get these additional features with your fixed-rate loan.

And if you need assistance, we may be able to help you find suitable and competitive interest rates in the market. Please note that fixing your rate may be considered a gamble to some extent.

You can enquire online or give us a call on 1300 889 743.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Can you highlight the benefits of a fixed rate home loan?

Post by Otto Dargan »

Hi chapati ,

A fixed rate home loan works in a very different way to a variable rate home loan.

You’ll lose a lot of the flexibility and may face high exit fees if you make changes to your loan or make extra repayments during the fixed rate period.

It’ advisable not to fix your loan if:
  • You need to make large extra repayments on your loan.
  • You may sell the property that is security for your mortgage.
  • You may refinance your home loan.
  • You plan to renovate or build a new home, often you may need to refinance.
  • You don’t like being locked in with a particular lender or loan product.
Nowadays, lenders provide flexible rate home loans where you could have some features of a variable and fixed rates as well.

Also, we can be reached on 1300 889 743 or you can fill in our free assessment form and one of our mortgage brokers will call you to discuss how you can get the best rate for your home loan.
Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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