fixed rate loan banner

A fixed rate loan is a loan in which the interest rate is fixed for port of the loan term, which is known as the fixed rate period. In the past fixed rate loans have been associated with having firm conditions, such as limits to the extra repayments you are able to make

Fixed rate loans have became fairly popular across Australia, ever since the introduction of relatively low interest rates and flexible new product, however they’re not as popular as standard variable rate loans and professional packages.

A majority of home loans which are under a fixed rate don’t allow extra repayments or include redraw facilities, but there are some exceptions.

Which Lenders Offer Fixed Rate Loans

From lender to lender the interest rates and fees that can be offered for a basic home loan will vary, however all the major banks offer similar features for their fixed rate loans. Some common basic loan products are:

  • CBA– MAV package fixed rate / Fixed rate loan
  • Rams- Fixed rate pro pack / Fixed rate
  • Westpac- Premier advantage fixed options home loan / Fixed rate interest in advance investment loan / Premier advantage fixed rate investment loan
  • St George- Advantage home loan package fixed rate loan / fixed rate home loan / Advantage home loan package introductory 1 year fixed rate loan
  • Suncorp- Money manager fixed rate / fixed rate home loan
  • ANZ– Fixed rate interest in advance loan / Fixed rate home loan

What Should I Know about Fixed Rate Loans?

If you have the desire to carefully budget your replacements then the fixed rate loan can be good for you, this means you will have to know the exact amount of money you need for each repayment so that you’re able to plan accordingly whilst at the same time doing this will give you a level of certainly and a sense of security.

However, you should keep in mind that many fixed rate home loans may still charge you for making early repayment, in saying this, you will have to make extra repayments then you will have to either keep the loan for the original term and pay the full interest or you will have to pay a fee.

What Should the Term of a Fixed Rate Loan be?

You will need to carefully consider the loan term, it is frequently between one and five years, three years being the most popular, though sometimes it can reach up to ten or even fifteen years with some lenders.

The three year loan term has grown to become a popular choice as it allows the borrowers to engage in a sense of security with flexibility which still being priced quite competitively.

The main important thing is to make sure that the decision of a loan term will suit your specific situation.

Please enquire online or call us on 1300 856 846 if you would like to talk with our mortgage broker who can give you expert advice on fixed rate loan.