Purchasing a home is one of the biggest investments you’ll make in your lifetime and financing this purchase isn’t something to take lightly. Borrowers have the choice of getting home mortgage loans with a fixed rate or a variable rate. At first, deciding which type of home loan to get can be confusing and sometimes overwhelming, but once you understand the facts it will become much less intimidating.

Fixed Rate

A fixed loan has a set percentage rate for a set period of time. The benefit of a fixed-rate loan is that you’ll always know what you’ll be paying in principle and interest because it won’t change for the life of your loan. This makes budgeting easy. Borrowers who take out fixed-rate home loans generally plan to stay in their homes for many years and usually choose a term of 20 or 30 years. A drawback to these loans is that if the interest rates dip under the rate you’re locked into, you’re out of luck. The rate on your loan will remain the same.

Variable Rate

Variable-rate loans are the more popular loans in Australia. The interest rate usually starts lower than that of a fixed-rate home loan but unlike a fixed-rate loan, a variable-rate loan will fluctuate with the market. That means if interest rates drop the rate on your loan will drop as well. On the other hand, if interest rates rise, you’ll be paying more for your mortgage every month. Variable-rate home loans are appealing for those who are planning to live in their homes for a shorter period of time, generally four years or less. Adjustment periods are built into these loans and this is when your interest rate is reassessed. That’s something to take into consideration when you do your research – if potential volatility will make you sweat this might not be the best choice for you.

Home Loan Rates Comparison

Before deciding, make sure to take a close – and realistic – look at your financial situation and think about your priorities and needs. Whichever type of home loan you choose, you’ll want to get the best rate possible and for that you can turn to an online home loan information provider. Borrowers can get a home loan rates comparison of hundreds of loans from a variety of lenders in minutes and can find the loan that best suits their needs – and their bank accounts.

Purchasing a home is one of the biggest investments you’ll make in your lifetime and financing this purchase isn’t something to take lightly. Borrowers have the choice of getting home mortgage loans with a fixed rate or a variable rate. At first, deciding which type of home loan to get can be confusing and sometimes overwhelming, but once you understand the facts it will become much less intimidating.

Fixed Rate

A fixed loan has a set percentage rate for a set period of time. The benefit of a fixed-rate loan is that you’ll always know what you’ll be paying in principle and interest because it won’t change for the life of your loan. This makes budgeting easy. Borrowers who take out fixed-rate home loans generally plan to stay in their homes for many years and usually choose a term of 20 or 30 years. A drawback to these loans is that if the interest rates dip under the rate you’re locked into, you’re out of luck. The rate on your loan will remain the same.

Tomorrow Finance provides tools to compare home loans from Australia\’s lenders. When you find the best home loan rates, you save!

Tomorrow Finance provides tools to compare home loans from Australia\’s lenders. When you find the best home loan rates, you save! http://www.tomorrowfinance.com.au

Author Bio: Tomorrow Finance provides tools to compare home loans from Australia\’s lenders. When you find the best home loan rates, you save!

Category: Finances
Keywords: home loans, home loans comparison