Fixed Interest Rate

Should I fix the interest or not? A question all borrowers ask themselves before taking on a mortgage.

Fixing your interest is like an insurance policy for your loan repayments, you know exactly what they will be for the life of the term.

You must remember though that the rate may go up or down and so it may cost you to fix or it may save you. It is unusual for rates to stay steady for an extended period of time.

Some banks offer mortgages where you can split your interest rates with a mix of fixed and variable.

Most lending institutions offer fixed rate loans for periods between 1 and 10 years. These loans are usually a contract to stay with the institution for the term of the fixed period.

If you choose to pay the fixed interest loan out early you could be liable for substantial early payout penalties.