When the market is changing and rates are on the rise, many home loan customers choose to lock in the current rate for a fixed number of years. Afterwards, the loan will become a standard variable home loan that moves with market interest rates.
Many lenders also allow you to tailor your home loan with split options, so that a part of your loan will be charged at a fixed rate and the other at the market rate, so that if unexpected rate changes occur against your favour, your entire loan won’t suffer.
Make sure you seek advice on current and future economic trends before you decide to fix your rate. During the recent rate cuts, many home owners have regretted locking in their past rates, and switching to a variable rate could cost them thousands.
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