Be Aware Of Fixed Rate Home Loans And Split Rate Home Loans?
Fixed Rate Home Loans: Is your mind not in peace and are you having a lot of confusions to know more about loan repayment immediately? You problem gets solved by Fixed Rate Home loan, which helps with a security to repay the loans with fixed interest rate for fixed period of time. This fixed rate loan helps you to prepare your monthly budget correct and exact.
The duration period is around one to five years as the repayments are fixed along with the period of fixed rate time. By the end of the fixed time, you will have an option of changing to the standard variable rate or a mixture of split loans.
Find when is the right time to fix the interest rate on a home loan?
Since the economic conditions are not under control, still the best economists can not be in a position to foresee the complete certainty like when the interest rates will increase or decrease. This is the reason most of the borrowers choose to fix the loan for a period of less than 3 years.
Do investigations before you consider taking a fixed rate home loan as to know the current financial situations and trends so that it helps us to get an idea about the interest rates where they are? It's always a thumb rule that everyone likes to fix the interest rate when they are very low and are at the bottom of the interest rate cycle.
Following all the advantages and disadvantages of the fixed rate home loan:
The Advantages are Equal repayments each month, You can plan your finances due to stable - fixed repayments and you can stick to your budget even in uncertain economic times, the interest rates don't change for every month repayment.
The Disadvantages are You will be paying more loan amount than the variable interest payers if the interest rates fall, Most lending institutions limit the sum of extra repayments you can have each year, You don't have an option to pay off the home loan before the expiry date else you will be penalized, there is no redraw facility in the fixed loans features.
Split Rate Home Loans: Want added security of a fixed rate home loan but also the flexibility of a variable rate home loan? With a Split Rate Home Loan you can have exactly that.
Are you interested to know what are the attractive features of a Split Rate Home Loan? The existing borrowers have the capacity to modify the home loan and add as many features you want. This split Rate home loan is divided into many combinations e.g 50/50 split or 80% variable and 20% fixed provided it meets lenders policy.
Consider the following pros and cons before you decide on a split rate home loan:
The Pros of a Split Rate Home Loan are Fixing portion of your loan can protect you against future interest rate rises, Leaving part of your loan at a variable interest rate allows you to benefit with a lower rate if interest rate falls, Have a fully featured home loan by combining multiple splits together.
The Cons of a Split Rate Home Loan are Different costs might apply to different portions of the loan e.g. fixed rate loans have a high break up cost, Limited amount of extra repayments might apply to the fixed portion of the loan, Flexibility to move to another lender might be costly due to the fixed component.
The duration period is around one to five years as the repayments are fixed along with the period of fixed rate time. By the end of the fixed time, you will have an option of changing to the standard variable rate or a mixture of split loans.
Find when is the right time to fix the interest rate on a home loan?
Since the economic conditions are not under control, still the best economists can not be in a position to foresee the complete certainty like when the interest rates will increase or decrease. This is the reason most of the borrowers choose to fix the loan for a period of less than 3 years.
Do investigations before you consider taking a fixed rate home loan as to know the current financial situations and trends so that it helps us to get an idea about the interest rates where they are? It's always a thumb rule that everyone likes to fix the interest rate when they are very low and are at the bottom of the interest rate cycle.
Following all the advantages and disadvantages of the fixed rate home loan:
The Advantages are Equal repayments each month, You can plan your finances due to stable - fixed repayments and you can stick to your budget even in uncertain economic times, the interest rates don't change for every month repayment.
The Disadvantages are You will be paying more loan amount than the variable interest payers if the interest rates fall, Most lending institutions limit the sum of extra repayments you can have each year, You don't have an option to pay off the home loan before the expiry date else you will be penalized, there is no redraw facility in the fixed loans features.
Split Rate Home Loans: Want added security of a fixed rate home loan but also the flexibility of a variable rate home loan? With a Split Rate Home Loan you can have exactly that.
Are you interested to know what are the attractive features of a Split Rate Home Loan? The existing borrowers have the capacity to modify the home loan and add as many features you want. This split Rate home loan is divided into many combinations e.g 50/50 split or 80% variable and 20% fixed provided it meets lenders policy.
Consider the following pros and cons before you decide on a split rate home loan:
The Pros of a Split Rate Home Loan are Fixing portion of your loan can protect you against future interest rate rises, Leaving part of your loan at a variable interest rate allows you to benefit with a lower rate if interest rate falls, Have a fully featured home loan by combining multiple splits together.
The Cons of a Split Rate Home Loan are Different costs might apply to different portions of the loan e.g. fixed rate loans have a high break up cost, Limited amount of extra repayments might apply to the fixed portion of the loan, Flexibility to move to another lender might be costly due to the fixed component.
About the Author:
Guy Baldwin is an executive of the website http://www.directmoneyhomeloans.com.au where you can get access to all leading lenders to get a best low ratesof home loan .You can also contact at 1300 882 432 and take their services free of charge.
posted by Credit Counseling at
10:07 AM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home