This loan has a set interest rate for a period of time. This means you know exactly what your repayments will be for your fixed rate term.

If you are unsure about whether to take a fixed or variable rate - you should consider a Split Loan.

Advantages

• Fixing the interest rate for a period of time insures against future rate rises.
• It is easy to budget for the same regular repayment each month.

Disadvantages

• If interest rates fall you may pay more for your loan than borrowers on variable rates.
• Most lending institutions penalized you for making additional repayments.
• You may be penalized if you pay off your home loan before the due date.