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Fixed Home Loans

What is a Fixed Rate Home Loan?

Fixed rate home loans could provide a sense of certainty in an ever-changing market. On the surface, fixed rate home loans appear very straightforward. The interest charged on your home loan is fixed at a set rate for a certain period of time, usually between one and five years.

The interest rate on a fixed loan could be slightly lower than a variable home loan rate. These loans might be money-savers in times of uncertainty when interest rates are either high or volatile but, if interest rates drop, you could miss out on big savings.

Australian interest rates have stayed comparatively low and stable in recent times, fixed home loans have remained a popular loan option, though perhaps trending lower than variable rate home loans.

Contrary to popular belief, fixed rate loans do offer some flexibility depending on the lender. Some features may include redraw facilities, offset accounts and other features that may enable the loan to be paid off in a shorter time period. However, some of these features could incur a fee and break costs could apply.

Benefits and Downsides of a Fixed Loan

The main benefits of a fixed loan is their straight forward nature, the certainty of knowing the fixed costs an investment could incur over a period and locking in a low interest rate for a fixed period of time.

A downside to fixed loans is in the occurrence of an unexpected event such as redundancy, marriage or an inheritance issue, these loans could be potentially costly. Also, at times the interest rate could be higher than for a variable rate loan – at other times lower. Therefore, it could be quite difficult to compare the two.

Comparing Home Loans

When examining comparison rates there are some things that should be considered in order to choose a loan that best suits your circumstances. Are you comparing a true fixed rate to a true fixed rate? Do you have access to a wide variety of options? Are you convinced you’ve identified any hidden fees and understood the effect of the various fees and charges?

Our finance consultants at Nicheliving Homeloans can take the hassle out of choosing and applying for a loan. Our goal is to get you the loan that best suits you, be it fixed, variable or another type of loan. We have access to a range of loan products and are always available to clarify and advise you on your financing options. Give one of our finance consultants a call on 9483 0099.

Talk to an expert about your loan

Our team of experienced home loan specialists aim to find the right loan to suit you and your specific needs. Book your appointment today?
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