Fixed Mortgage Interest Rates give you the ability to lock in your interest rate for a set period of time.
This may suit you if you want the assurance of knowing exactly what your repayments will be & therefore give you confidence to budget accurately & plan you finances.
We caution against using Fixed Mortgage Interest Rates to “beat the market”, as you’re effectively gambling on future interest rate movements.
It also may not be a good idea to fix your interest rate if you think you might sell; your property, make large lump sum repayments, switch to a variable interest rate or vary your loan in any way during the fixed term.
If you break out of a Fixed Rate mortgage early, make large lump sum repayments over & above a certain amount, (varies from Lender to Lender), or vary your loan in any way that constitutes breaking out of the fixed rate period early, then you may have to pay the Lender an Early Repayment Penalty, (ERP).
The ERP may amount to many thousands of dollars.
Neither the Lender nor your Better Choice Mortgage Services Finance Consultant can predict or estimate for you what that ERP may be.
The amount of the ERP is dependant on a number of variables, for example (and the following list is not exhaustive):
Furthermore, you may also want to consider that a number of features that are associated with Variable Mortgage Interest Rate loans , may not be available with a Fixed Mortgage Interest Rate loan, e.g.
Neither the Lender nor your Better Choice Mortgage Services Finance Consultant can advise you as to whether your should take a Fixed Mortgage Interest Rate Loan or a Variable Mortgage Interest Rate loan.
We strongly recommend that you as the client undertake your own research, evaluate the features & benefits of either loan type , and seek independent advice when considering the option to fix the rate on their loan.
The borrower may chose to fix the rate on part of their mortgage & leave the rate variable on the remaining portion of the loan.
It is solely the borrowers’ decision as to whether you chose to Fix the rate on your mortgage or not.