Banks are currently tussling to win new business as Home Loan options become increasingly competitive. It’s important to consider Fixed & Variable Interest Rates and the features that will benefit your circumstances the most.
Depending on the lender, fixed interest rates can be locked in for as many as 10 years (although we don't advise this lengthy timeframe). Fixed rates offer the certainty of knowing the exact amount of your repayments. If you have set a clear budget and believe that you would benefit from knowing the exact amount that your repayments will be, then a fixed rate could be more beneficial to you.
As a general rule, a home loan with a variable interest rate offers flexibility as it allows you to make additional repayments or redraw from your home loan. Lump sum payments, such as your tax return can be deposited into your variable home loan. There are other benefits that come with a variable home loan although keep in mind that both rate decreases or increases can occur.
It’s also important to think about your everyday banking requirements when selecting a loan type, below is general guide on what to expect with a fixed or variable home loan.
Some other options to consider are Split Loans, Interest Offset Accounts and Home Loan Packages. A Let’s Finance Home Loan Specialist will be able to help you discover if these options would be more suitable.
Whether you choose a fixed or variable home loan, one tip that you can benefit from is to make fortnightly repayments. There are 26 fortnights per year so making fortnightly or weekly repayments means that you are effectively making an extra months repayment per year.
Also, where possible, pay more than the minimum, you can really see the benefits when putting this into figures.
Note: our example was on a $450,000 loan at a rate of 5.4%).
We spend our days familiarising ourselves with home loan products and will gladly explain what is currently on offer. If you have any queries or would like some further information, chat with us:
P: 08 9315 8888
E: firstname.lastname@example.org or
Chat to our online Home Loan Specialist now.
This is a general information guide only and does not take individual financial circumstances into account and therefore must not be relied upon. Please consult a Home Loan Specialist for advice specific to your financial situation.