Fixed Rate Home Loans

Fixed interest rate home loans

Fixed interest rate home loan & mortgages are available within most lending institutions within Australia. When considering a home loan, one must ultimately choose the loan which best suites the needs of the borrower. Yet many people are unaware how a fixed rate home loan works, and what advantages it can give.

Put simply, a fixed rate home loan involves an interest rate which is fixed. Hence the interest rate on this type of loan does not move within the specified period nominated by the borrower.

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Fixed rate home loan FAQ's

How long can I fix my rate for?

Different lenders offer different fixed rate terms. Basically this means that depending on the lender, you could have any of the following fixed rate terms:

  • 1 year fixed home loan
  • 2 year fixed home loan
  • 3 year fixed home loan
  • 4 year fixed home loan
  • 5 year fixed home loan
  • 7 year fixed home loan
  • 10 year fixed home loan
  • 15 year fixed home loan

In any of these periods, the interest rate will neither increase nor will it decrease.

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What is a fixed rate lock?

When you apply for a fixed rate home loan, you are offered the rate available on the day of application. Since a settlement of a loan can take 3-6 weeks, there is the chance that rates can fluctuate in this period. Hence it is not guaranteed that you will get the same rate on settlement as the date you applied for the loan.

In this case, lenders have introduced a rate lock fee to hold a particular rate for up to 90 days from the date of application to stop an interest rate from increasing between application date to settlement. This rate lock fee is generally charged by most lenders who offer fixed rate loans, but not all. The method of calculating the rate lock fee on a fixed rate home loan differs from lender to lender. As a rule, some lenders can charge a flat fee like $90 to a one off percentage charge of loan amount like 0.15%. This will translate into a one-off $300 charge on a $200,000 loan.

It is worth noting that there are few lenders who will give the rate lock for FREE!

At Mortgage Providers, our consultants are familiar with different lender's pricing and policies regarding fixed rate loans. Our consultants know how to package up the most flexible fixed interest rate home loan. We work hard to negotiate the best interest rate, with all the flexible features possible, without the client incurring rate lock fee charges. Call us today on 1300 656 600 or send us an online enquiry and we will contact you!