Fixed rate home loans have an interest rate that is fixed for a set period of time and at the end of the fixed rate term the loan will automatically switch to the standard variable rate offered by the lender unless you take up the option to rollover for another fixed term – but don’t stress because if you have a good mortgage broker on board you won’t need to worry as they will generally have a reminder set in their calendar and ensure to get you onto the next great product before this time comes to an end.
Fixed Rate loans will have a set term and interest rate which will can range from 1 year to 10 years, however with most products and scenarios the sweet spot for a great rate and product offering is usually at the 2 or 3 year mark, however when you talk to your mortgage broker Gerry he will be able to explain this further.
Fixed rate loans may appeal to borrowers who like to keep a set budget as you can be certain of your home loan repayments for while the set time a fixed period is in place. Fixed rate home loans can also be combined with variable rate products otherwise known as a split loan to essentially have the best of both worlds of a variable rate loan for flexibility and a fixed rate loan for security.
When choosing to go down the path of a fixed rate home loan you need to consider that if you are planning to sell or move out of the property in the future that it will not occur during the fixed rate term as refinancing or breaking the loan during the fixed period can incur break fees.
If you have a question regarding anything at all spoken about in this article or anything related to Fixed Rate home loans then click here to talk to your finance broker Gerry and he will be able to assist with answering any questions you may have.