Fixed Rate
- Allows you to fix your interest rate, and thus your repayments, for up to 10 years.
- Once the fixed rate period is finished the rate will usually revert to the institution’s standard variable rate unless you decide to rollover to another fixed term.
- This is a good loan to be in times of rates rises, but you can be disadvantaged if the rates start falling.
- Generally most lenders restrict the amount of extra repayments you can make on fixed rate loans. Usually the limit is $10,000 p.a. as extra payments. If extra repayments exceed this amount then break costs may apply.
- If a fixed rate loan is paid out (including refinanced) during the fixed rate period a hefty break cost may apply.
