Fixing your Sydney mortgage interest rate allows you to fix the rate you pay for set period of time. You know your budget wont falter despite any changes in the market, so while the variable mortgage rates might go up and down, you’ll be safely locked into a fixed interest rate mortgage, with regular mortgage payments. .
How long can I fix my rate for?
Usually a loan rate is fixed for one to fove years, although this can vary from lender to lender. The longer the fixed term is the higher the rate, but this is usually very small in difference.
How do I know if I should fix?
This is the million dollar question! Interest rates usually move on a cycle. What this means is that rates will usually be on the rise or on the way down. So if rates look like they are on the rise, now could be the time to fix. If rates are being cut however, you may be better of on a variable rate loan, where you can take advantage of the savings. Talk to your mortgage broker about what it best for you.
What rates will I pay on a fixed home loan?
Rates will be similar to variable rates, depending upon the rate cycle. If rates are low anyway or are on the way down, then it may not make sense to fix your rate. But if you think that rates will rise in the near future, then setting your rate now could save you thousands in the long run.
What about a split home loan?
Worried that you could make the wrong choice? Unsure what direction rates are going? Consider if a split-loan might be right for you. If you are really unsure over fixed or variable, then you can take out a split variable/fixed loan. Most commonly, the split would be 50/50 or 60/40. This allows you to make early repayments on part of the loan, without exposing the whole amount of the loan to rising interest rates. (Penalty rates will still apply if you quit the fixed portion of the loan
Everyone is different and so you should talk with us to look at your personal circumstances. For the latest on interest rates, call your Local Sydney Mortgage Broker.