This loan is exactly as it sounds. Your interest rate gets fixed for a period of time (normally 1-7 years). This gives you protection against rising interest rates. You’ll also know exactly what your repayments will be for the fixed rate period. At the end of the fixed rate period you’ll have the option to re-fix for another term or revert to a standard variable rate for the remaining term of the loan.
If however, rates go down, you may find yourself locked in to paying a higher rate than those borrowers on variable rates. You may also be penalized if you pay out your loan prior to the end of the fixed rate period.
First Home Buyer
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