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A Standard Fixed Rate Loan has a guaranteed interest rate and repayments for initial fixed rate periods ranging from 6 months, 1, 2, 3, 4 or 5 years. Loan terms usually up to a maximum of 25 or 30 years. A rate is set which applies for the fixed term. At the end of this term you can either continue with a fixed rate for another set period, or switch to a Standard Variable Rate Loan offered, usually with little or no cost.
A fixed rate loan offers the security of knowing your repayments will stay the same for an agreed period of time. Guaranteed repayments make it easier to budget into the future.
The amount you may borrow will depend on the level of security offered and your ability to repay the loan. A registered first mortgage on residential and/or commercial properties is required.
Repayments may be principal and interest or interest-only #. The interest-only option is available for a maximum of 5 years. Repayments are usually calculated daily and paid monthly in arrears. Your repayments will be automatically deducted from a nominated bank account. Fees vary from bank to bank & the maximum loan term is 30 years.
After the initial fixed rate period your options will include:
(i) Continue with any other fixed rate term then on offer;
(ii) Allow the interest rate to convert automatically to the standard variable rate.
Principal reductions usually are allowed however early pay out penalties (EPO’s) may apply to Fixed Rate Loans. Usually for a small fee, the loan can be transferred to another acceptable property, saving on loan stamp duty and loan establishment charges. Mortgage documentation and valuation charges may still apply, and transfers are subject to bank approval. #Investors only.
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