Topic - Interest Rates:
Interest rates quoted by all Australian lending institutions will vary according to the type of housing loan product you’re looking for and these will be either Variable, Fixed or a combination of the two.
Through history the most favoured is the variable rate, this
is due to its flexibility and generally most lenders will not impose a fee
to exit (payout or refinance) a variable rate facility.
Variable is a floating rate, and like all interest rates used to calculate
Interest charges in Australia (under the Uniform Consumer Credit Code) is
calculated and charged on your outstanding loan balance. All Banks and other
lenders use this rate as a benchmark which is set against to the Reserve Bank
of Australia’s “Cash Rate”, plus the relevant lender’s
margin above that cash rate.
Also, most all lenders offer Fixed (or locked) Interest Rates
and these offerings can vary from 1 year through to 10 years, however the
10 year rate is offered only by a select number of lenders.
As a general rule most borrowers will elect for the “middle of the road”
option of either 3, 4 or 5 year terms, as 10 years is considered by many as
too far over the financial horizon, to guesstimate.
If you're considering a Fixed Term facility, then we would be pleased to discuss this with you as there is a vast range of fixed facilities available from our panel of lenders.