Fixed Rates
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A fixed home loans interest rate stays constand even though the official cash rate moves. This type of loan can give repayment stability and better financial management for a borrower for the duration of the loan term but one of the negatives is that additional repayments are usually not allowed.
While the variable interest rate sticks with the changes that the Reserve Bank of Australia sets, the value of fixed rates is determined by the lenders according to the level in which both parties can get the best value for their money. Because of the fixed repayment, you’ll have the same monthly repayment for the term you have selected. This gives you the ability to better manager your expenses.
When considering a fixed loan you should also take into account your future intentions. It may be costly to break a fixed rate, so you shouldn’t be thinking of selling or refinancing during the fixed rate period.
