Fixed Interest Rates - What's the Deal?
When looking to purchase properties, chances are you’ll need to take out home loans in order to be able to afford the price tags.
Mortgages are long-term loans from the bank which are usually paid off over the course of 15 - 25 years.
There are multiple different types of home loans, with the difference usually being the interest rate involved.
Here we will take a closer look at fixed interest rates and the different aspects involved with choosing this type of home loan.
Fixed Home Loan
A fixed home loan is a type of mortgage where the interest rate remains steady. Interest is the profit a bank makes from their initial loan and accumulates over the repayment period.
With a fixed interest rate, the extra amount paid on top of the loan will remain constant for a fixed period of time.
The good thing about this is changes in the market won’t affect the monthly repayments for the period your rate is held, which will remain steady for the investor.
This may make fixed home loans the preferred choice for those who are looking for security and stability in their loan repayments.
It is important to note that the length of fixed interest rate periods often vary with different lenders.
To get more detailed information on your situation, talk to a Loan Market mortgage broker today.