More Australian’s are choosing a fixed rate home loan instead of the more traditional variable rate option. While in the past it was difficult to secure a flexible fixed rate loan, today that is changing. Many lenders are now offering great deals for fixed rate loans, and some consider them the best home loan Australia has to offer. If you are considering a fixed rate loan here is what you need to know.

The Advantages of Fixed Rate Home Loans

There are some advantages to choosing a fixed rate loan over a variable rate. First, fixed rate loans offer the security of knowing that your mortgage payment cannot go higher. Your payment is always budget friendly and will be the same each month. When interest rates rise you do not need to worry.

The Disadvantages of Fixed Rate Home Loans

While there are some benefits of fixed rate loans there are also some disadvantages you should consider. While fixed rate loan packages have become more flexible, many still have numerous restrictions. You will need to be aware of penalties and fees that are often attached to fixed rate loans. These might include fees if you decide to make additional payments on your loan or decide to pay your mortgage off early. Additionally, you will need to keep in mind that if the interest rates go down you will not see the benefit of the lower rate. You will be stuck playing the higher interest rate. Finally, fixed rate loans often carry higher starting rates over variable rate loans.

Making the Decision Between a Fixed and Variable Rate Loan

You will want to carefully consider which type of home loan is right for you. History does show that over the lifetime of a home mortgage it is usually cost effective to go with a variable rate home loan package. The reality is that this could be changing. There is no way to know for sure what type of loan for certain will be beneficial over time. To help you decide look at your personal situation today. One thing to highly consider is whether you will benefit from having a fixed rate payment or whether you have some flexibility in your budget that can accommodate the fluctuation of a variable rate loan.

Securing a Flexible Fixed Rate Home Loan

If you do decide to secure a fixed rate home loan, make sure you shop around to find one that offers the best flexibility available. Many mortgage lenders are now offering fixed rate packages that allow for additional payments and carry no penalties for paying off your loan early. Finally, be sure to carefully compare interest rates before deciding on a loan package.

While in the past it was difficult to secure a flexible fixed rate loan, today that is changing. Many lenders are now offering great deals for fixed rate loans, and some consider them the best home loan Australia has to offer.

Tomorrow Finance compares hundreds of home loans from Australia\’s best home loan lenders. Their home loan comparison software can find out how much you can save by getting the best home loan rates.

Tomorrow Finance compares hundreds of home loans from Australia\’s http://www.tomorrowfinance.com.au/ best home loan lenders. Their home loan comparison software can find out how much you can save by getting the http://www.tomorrowfinance.com.au/best-home-loan best home loan rates.

Author Bio: Tomorrow Finance compares hundreds of home loans from Australia\’s best home loan lenders. Their home loan comparison software can find out how much you can save by getting the best home loan rates.

Category: Finances
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