What is a fixed rate home loan?
A fixed rate home loan is an interest rate on your home loan rate for a set period of time. This means that your loan repayments will not increase or decrease if the home loan interest rate market changes.
During the Covid19 pandemic and soon after, fixed rate home loans were at an all time low. In 2020 & 2021 it is estimated that Australian Banks lent $394 Billion to Australian borrowers with fixed rate home loans. Lenders offered these low rates from 1 to 5 years with the majority coming to an end in 2023.
What happens when your fixed rate loan expires?
The lender will automatically covert your home loan to a variable rate home loan. Lenders have their own rules on how the revert rate is determined. Some lenders have a discount loaded against the standard variable rate and some lenders have a set product and rate at the time of expiry of the fixed rate home loan.
What are your home loan options?
You have 3 options to review when your fixed rate home loan expires –
- Refix your home loan with the current lender
- Roll over to a variable rate with your current lender
- Review other lenders and refinance
What can we do to make sure your loan remains competitive?
At Launch Finance we can speak to your lender and discuss the variable rate on offer.
Once we know what the current lender is offering, we will be able to help review other lenders that may be able to offer you a lower interest rate.
We will review the interest rates on offer and compare the current lender to other lenders potentially offering a lower home loan interest rate. We will review the costs associated with all lending options and any switching costs.
When this information is complete, we can discuss the options you have with your home loan and determine what home loan structure will help with your financial position.
If you would like to discuss your home loan options with your broker, please feel free to reply to this email or contact the office on 08 9367 4222 asking for your broker.