If you are looking for the security to have a fixed interest rate for your home loan, irrespective of the rate fluctuation in the market, you are one of those many Australians who want to get relief from the repayments needed to make during the initial phase of your home ownership, you can apply for fixed home loan.
What is fixed home loan?
The fixed home loan has fixed interest rate for an initial period and the repayment period is also fixed which varies from 6 months to 15 years. Generally you can ‘lock’ your repayment between 1-5 years. It gives stability to the borrowers in the initial stage and after the completion of the fixed term it changes to a variable loan. It also gives you option to apply for another fixed term, after completion of the initial period. The total loan term is for 25 to 30 years.
What are the pros and cons of fixed interest rate home loans?
The fixed interest rate home loans are very popular in Australia. Some of its advantages and disadvantages are mentioned below:
Pros
• It gives you redraw facilities and option of making extra repayments
• It helps you to plan your budget as you will know exactly how much you need to pay towards your mortgage
• It gives you a feeling of security and certainty as you will be aware of your upfront expenses
• If the interest rate in the market falls you can make changes in your payment terms and conditions.
Cons
• You cannot have lower interest rate of the market rate goes down
• If you want to make extra payment in addition to the fixed amount, you have to pay an extra charge for it. It means that even if you are financially stable to make extra payment, you have to do it by paying an extra amount or you have to make the fixed minimum payment till the end of the loan term and pay the full interest.
• It does not have so many flexible features as that of a standard loan
• You need to make additional payment for any alteration you want to make towards the loan terms and conditions
You need to weigh the pros and cons of fixed home loan mentioned above, according to your affordability, before you apply for it.
Compare more Fixed Rate Home Loans>>
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Mortgage |
Interest Rate $250k (pa) |
Comparison Rate (pa) |
Features |
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Dream Catcher |
6.13% |
6.47% |
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UHomeLoan - Refinance only (6.14%p.a incl 0.20%p.a lifetime Loyalty Discount) |
6.14% |
6.14% |
The Best Refinance Rate in the Australia.
Enjoy a low 6.14% p.a. (6.14% p.a. includes ... |
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State Custodians Standard Variable Offset Loan |
6.22% |
6.45% |
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First Homebuyers Loan Package |
6.39% |
6.69% |
We help home buyers who qualify for the First Home Owners Grant to buy their first pro ... |
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Renovators Loan Package |
6.39% |
6.69% |
We help home owners who are looking to substantially renovate their existing dwelling ... |
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Construction Loan Package |
6.39% |
6.69% |
We help home buyers who are looking to build a new dwelling or buy one off the plan wi ... |
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Premium Plus Package Home loan |
6.39% |
6.70% |
Comes with a range of flexible repayment options, a 100% Mortgage Offset Account, acce ... |
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goGreen Home Loan |
6.48% |
6.53% |
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Liberty Star Home Loan |
6.49% |
6.79% |
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Professional Package Variable |
6.53% |
6.79% |
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Mortgage Simplifier |
6.62% |
6.62% |
For a limited time, Mortgage Simplifier will have an interest rate discount of 0.16% p ... |
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Variable SmartFit |
6.64% |
6.82% |
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Mortgage |
3yr Fixed
$250k (pa) |
5yr Fixed
$250k (pa) |
Features |
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Fixed Loan |
5.95% |
6.39% |
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UHomeLoan for refinancing - Fixed Rate Loan |
5.98% |
6.84% |
• Competitive interest rates / Loyalty Discount
• Online or over the phone application ... |
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Fixed Rate Loan |
5.99% |
6.69% |
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Fixed Rate Loan |
5.99% |
6.49% |
Loan reverts to Mortgage Simplifier at the end of the fixed rate term. |
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Fixed Rate Home Loan |
6.14% |
6.64% |
2009 AFR Smart Investor Blue Ribbon Award Winner |
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Fixed Loan |
6.14% |
6.95% |
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Standard Fixed Rate |
6.24% |
6.84% |
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Fixed Portfolio Loan |
6.24% |
6.84% |
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State Custodians Standard Fixed Home Loan |
6.26% |
6.61% |
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ANZ Fixed Loan |
6.29% |
6.79% |
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Fixed Rate Home Loan |
6.29% |
6.99% |
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Fixed Home Loan |
6.39% |
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Compare more home loans >>
Home Loan Comparison interest rates in this table are based on a loan amount of $150,000 and a term of 25 years.