Should you fix your home loan?
With great deals on “fixed rate” products peppering the market place, it’s a great time to look at whether or not a fixed rate product is right for you.
With great deals on “fixed rate” products peppering the market place, it’s a great time to look at whether or not a fixed rate home loan is right for you.
Why Fix Your Home Loan?
Most mortgage holders who choose to fix do so primarily to have the peace of mind of the certainty of what their repayments will be. During the fixed rate period there is no need to be concerned about rate fluctuations as these are irrelevant on a fixed product. Furthermore, in the current climate fixed rate products have grown markedly in popularity due to the current competitive fixed rates available, so saving money is at the forefront of customers’ agenda when they are deciding to fix.
Why NOT to Fix Your Home Loan?
Fixed rate loans have always been generally less flexible than their variable counterparts with limited ability to offset, pay extra or redraw additional funds paid into the loan. These restrictions are beginning to ease for some lender’s fixed products but as a general rule you can expect to not have the freedoms associated with a variable product.
Another consideration to bear in mind is that by paying the loan off early you may stand to be charged an early exit fee. Therefore, if you don’t expect to have the property by the end of the fixed rate expiry then this product may not be suitable.
Why Not Both?
Why not indeed. We see many of our clients opting to split their loan so that they have the full benefits of both fixed and variable rate loans. Whether it be a full refinance to another lender or just splitting up your current lending with your existing bank, your Blackburne Mortgage broker will be able to help you decide what product and structure is right for you.