By definition, a fixed rate loan is where there is no fluctuation in your interest rate over a specific term (usually between 1 and 5 years).
You may be thinking of fixing or even refixing your home loan now. If you are considering this, be sure to speak with your Perth Mortgage Broker at Loan Monster.
Loan Monster have put together a benefits vs risks summary if you are thinking about fixing your interest rate on your home loan.
|Benefits of a fixed interest rate||Risks that require consideration|
|Budgeting is easier – your repayments will remain the same for the fixed term so you know exactly what you are spending each month.|
|There are limits sometimes to extra payments you may want to make depending on the lender for example, the limit may be $10k in extra repayments per annum.|
|Rate increases will not affect your loan repayments, so while others may be feeling the pinch of an interest rate rise you will not need to worry.|
|Rate decreases will not affect your loan repayments, so while others may be feeling the relief of an interest rate reduction you will pay your usual repayment.|
|Ability to fix in when interest rates are low. Taking advantage of low rates can ensure you keep repayments manageable for the life of the fixed rate term.||A redraw facility may be not be available with a fixed rate loan and therefore you cannot redraw any extra funds.|
|Break fees may apply to a fixed rate loan if you decide to refinance or repay within the fixed rate term.|
If you are coming to the end of a fixed rate contract, it may be time to speak with your Mortgage Broker at Loan Monster on (08) 9336-4489 or visit the website today at www.loanmonster.com.au
We will be able to assess your current situation and tailor a solution that meets your current and future needs.
* The information contained in this website should not be taken as constituting personal advice. We recommend that you seek professional assistance before acting upon any information provided or linked on this web site