Loan Options

Fixed Rate Home Loans

A fixed rate home loan is where you pay the same interest rate for an agreed term, generally one to five years. Even if the Reserve Bank increases the official interest rate, your fixed rate remains the same.

The main advantage is it allows you to more easily budget for your monthly expenses, as you know exactly how much you will be spending on your mortgage. The disadvantage is if the Reserve Bank lowers official interest rates your rate remains the same, so you can end up paying more than you would have paid on a variable rate. There can also be break costs for paying out the loan during the fixed term and there are usually restrictions on making additional repayments.