How to get the best fixed interest rates in Australia

By the resi financial blog team, 28 August 2013

How to decide what fixed rates are good deals

When you sign on for a home loan, one of the biggest decisions you will make is whether to opt for a fixed or variable interest rate. There are advantages and disadvantages to both options, however for those willing to do their research and be patient, opting for a fixed interest rate at just the right time can be hugely beneficial.

Here are a few tips that might help you track down the cheapest fixed rate home loan on the market.

Do your homework

In order to secure the best fixed interest rate available, it's important that you have done your homework and understand the basics of the Australian real estate market.

You don't need to be an expert, but having a basic knowledge of the various influencing factors that affect interest rates, like the Official Cash Rate (OCR), will enable you to gain better foresight as to how rates may change in the future.

Know what you want

In order to narrow down your options and make a confident, assured decision, you need to understand what you want out of your home loan before you go hunting for the best interest rate.

First and foremost, take a close hard look at your finances and understand what resources are available to you. Then, look ahead into the future and consider what your lifestyle circumstances might be several years down the line.

This will give you a better idea of the sort of terms you'll want from your home loan. Remember, the features of a home loan are just as important as the interest rate itself.

Fixed Rate Term Options

Another factor to consider is the term of the fixed loan. You can generally fix an interest rate for up to five years.

However, before locking yourself into a longer term you will need to carefully consider how your circumstances may change over that period. If for any reason you need to break the fixed period of your loan you will likely be up for expensive cancellation fees.

Categories: Home Loans