Is It Time To Lock In? Contact Priority.
Don't forget, Priority Home Loans are here for the full term of your loan. Our service goes far beyond the settlement date. So if you are looking to refinance, top-up your loan or lock in a fixed interest rate, let us know and we can take care of it all for you.
Now let's talk about fixed-rate loans.
The option of locking in an interest rate on your home loan can guard against possible future fluctuation. This sounds attractive, however, it pays to know the ins and outs of fixed-rate loans before committing to one.
When purchasing a property, borrowers can decide between fixed-interest loans that maintain the same interest rate over a specific period of time, or variable-rate loans that charge interest according to market rate fluctuations.
Fixed-rate loans usually come with a few provisos: borrowers may be restricted to maximum payments during the fixed term and can face hefty break fees for paying off the loan early.
However, locking in the interest rate on your home loan can offer stability.
“For those conscious of a budget and who want to take a medium-to-long term position on a fixed rate, they can protect themselves from the volatility of potential rate movement,” the finance broker says.
Fixed rates are locked in for an amount of time that is prearranged between you and your lender.
“There are some lenders that offer seven-year or 10-year fixed terms, but generally one to five years are the most popular terms,” the finance broker says. “The three- or five-year terms are generally the most popular for customers because a lot can change within that amount of time.”
Further to this, fixed-rate loans can also be pre-approved. This means that you can apply for the fixed-rate loan before you find the property you want to buy.
“When you apply for a fixed rate, at the point of application you can pay a fixed rate lock-in fee which will, depending on the lender, give you between 60 and 90 days from the time of application to settle the loan at that fixed rate,” the broker explains.
“You pay a fee to protect your interest rate. Alternatively, you can choose to lock the rate in at the time of actual approval.”
Pre-approval helps you to discern how much money you are likely to have approved on official application. Knowing that your potential lender will offer a fixed-term interest loan grants further peace of mind for those borrowers looking to budget precisely rather than be susceptible to rate fluctuations.
Priority Home Loans are loan specialists. And we are here for the full term of your loan. So whether you already have a loan or thinking of purchasing in the future, don't forget that our service continues well past the settlement date. Thinking of refinancing, topping up your loan or locking in a fixed rate, we will do it for you. Contact us us today.