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Fixed Rates

You repay only the interest on the amount borrowed usually for the first one to five years of the loan, although some lenders offer longer terms.
Because you’re not also paying off the principal, your monthly repayments are lower.  At the end of the interest-only period, you begin to pay off both interest and principal.
These loans are especially popular with investors who plan to pay off the principal when the property is sold, having achieved capital growth


Repayment Options

Principal & Interest

Repayments are calculated on the total term of the loan and the fixed interest rate that you select.


Weekly or fortnightly repayments

Instead of a regular monthly repayment, you pay off your home loan weekly or fortnightly.
This can suit people who are paid on a weekly or fortnightly basis, and will save you money because you end up making more payments in a year, cutting the life of the loan.

Interest only

You only pay the interest on the loan, not the principal, usually for the first one to five years although some lenders offer longer terms.
Many lenders give borrowers the option of a further interest-only period.  Because you’re not paying off the principal, your monthly repayments are lower.
These loans are especially popular with investors who pay off the principal when the property is sold, having achieved capital growth.


Other Features

Direct Debit

Your lender automatically draws repayments from a chosen bank account.  Apart from ensuring there is enough cash in the account, you don’t have to worry about making repayments.


Portable Loans

If you sell your current property and buy somewhere else you can take your home loan with you.  This can save time and set-up fees, but you may incur other charges.

Professional package

Home loans over a certain value are offered at a discounted rate, combined with discounted fees on other banking services.  These can be attractively priced, but if you don’t use the banking services you may be better off with a basic variable loan.


What you need to know

Benefits

  • Your regular repayments are unaffected by increases in interest rates.
  • You can manage your household budget better during the fixed period, knowing exactly how much is needed to repay your home loan.
  • It gives you peace of mind knowing exactly what you need to pay.
  • If you lock in now you would be taking advantage of some of the lowest fixed rates seen in the past 40 years.

You should be aware of

  • Once your locked in then you can’t early repay
  • You will be up for a penalty cost and associated fees to early repay
  • If your thinking of offloading your property in 3 years time don’t lock in for 4 years