Getting a great deal on your fixed rate loan is an excellent option as it helps to ensure that you will be getting the very best rate throughout the course of your repayment period. Unlike variable loans, however, fixed-rate loans need to be chosen carefully. At Hunter Galloway, we have identified some of the things that you should take into account when choosing your loan:
- Know when to fix your interest rate
Fixing your interest rate is an excellent choice when interest rates are generally low. This way, you are ensuring that you have a low-interest rate over the course of your loan. However, what sometimes happens is that people fix their interest rates when they are already considerably high because they fear that they will increase even further, and what can happen instead is that the reserve bank cuts interest rates, making them drop below the interest rate you were fixed at. Determining whether it is a good time to fix your interest rates is complicated, but our team of interest rate specialists at Hunter Galloway will be more than happy to help.
- Know whether you should fix your interest rate
People often don’t realize that they would be much better off with a variable rate rather than a fixed rate loan. One of the main reasons for this is that fixed rates tend to have break fees. Break fees prevent you from making large additional repayments so that if you do not closely follow the repayment terms as stipulated in your contract, you will be paying major penalty fees. Take a look at some of the things you will not be able to do if you have a fixed rate loan:
- Refinance your home loan
- Sell your property without incurring large exit fees
- Make a large lump sum repayment
- Choose the right lender
The main strategy that people have when applying for a loan is going to their own bank and trying to negotiate a good rate. The problem with this is that different banks and lenders have entirely different fixed rates. A lot of variety can exist on the market so it is important to have a Hunter Galloway broker by your side to make sure that you are considering all options. Also, our mortgage broker will be able to negotiate on your behalf, making sure that you get a great offer from one of your preferred lenders.
Fixed Rate Home Loan Advantages
Deciding whether you are going to go for a fixed rate or a variable interest rate loan is not an easy decision to make. You might have noticed that the media constantly reports on whether interest rates are going up or down. Sometimes, these predictions are correct, but other times they get it completely wrong. Using media reports to guide an important decision like this one is not the best idea. At Hunter Galloway, we can help you make an educated decision about the type of loan to go for, without actually relying on media reports.
Sometimes, however, what happens when you are in the process of securing a fix rate loan is that the interest rate might change between the time you apply for the mortgage and the time that your loan is advanced. This will mean that you will get a new fixed rate which may be higher or lower than the one that was presented to you at the time of signing. In order to prevent this from happening and ensure that you are getting the initial rate, you can pay a “rate lock” fee. This fee usually amounts to about 0.15% of your entire loan amount, but it will help to make sure that you are protected from rate increases.
Fixed Rate Housing Loan Help
Do you need help in determining whether you should get a fixed rate or variable rate loan? If so, our team at Hunter Galloway can help. We have years of experience in helping our customers make the right decision about the different loan options that are available to them. For a free consultation and more information about the services that we provide, feel free to contact us today at 1300 088 065!