Borrowers have one important question to themselves regarding their Home Loan and that is either “to fix or not to fix?” It is crucial to think about your decision many times in order for you not to encounter difficulties in the process of settling repayments.
Australian borrowers are mostly attracted to fixed-rate home loan offers because of assurance. A fixed-rate home loan is the advisable home rate loan for first-home buyers as they are the ones who are tight on their budget. In doing so, they can carefully plan for their budget and stay on top of their repayments.
Most borrowers hose to fix their home loans in order to protect it from unexpected interest-rate hikes. Don’t plan on fixing your home loan rate for just 2 years as it will not give you protection from interest rate hikes. Therefore, lock your loan for a term of 3-5 years in order for you to get the maximum interest rate protection for a fixed-rate loan. Also, never exceed for 5 years as it will only restrict the flexibility of your home loan.
You can just go for a split loan if you want to have both the stability of a fixed rate and the flexibility of a variable rate.
The part of your loan that is fixed will still be protected from sudden interest rate hikes and on the other hand, the variable part of your loan enables you to make unrestricted repayments.
Having a plan of fixing your home loan now will enable yourself to be protected from sudden rate hikes from the Reserve Bank Of Australia or some others from your bank that might happen within your fixed term.
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