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90 Marine Terrace Fremantle, WA, 6160

Fixed Rate Home Loans

Fixed Rate Home Loans
I’m Brodie Brown, Managing Broker here at BH Brown Mortgage Brokers. Based in Fremantle we specialise in home loans for a range of different situations and work with clients right Perth’s Western Suburbs.

fixed rate home loans EXPLAINED

A fixed rate home loan allows you to set your interest rate for a period of time. This is usually in the range of one to five years. Sometimes, you can arrange to secure your interest rate for longer.

Fixing your interest rate can be a suitable option for some people, however you should be aware of the following:

  • Fixed rate home loans often have higher interest rates than variable rate home loans. Often, the longer the fixed rate term, the higher the interest rate is likely to be. For example, a five-year fixed loan will usually have a higher rate than a three-year fixed loan.
  • If interest rates do not rise, or if they fall during your fixed rate period, you could then pay more interest than you would if you had a variable rate home loan.
I’m Brodie Brown, Managing Broker here at BH Brown Mortgage Brokers. Based in Fremantle we specialise in home loans for a range of different situations and work with clients right Perth’s Western Suburbs.
Fixed Rate Home Loans

fixed rate home loans EXPLAINED

A fixed rate home loan allows you to set your interest rate for a period of time. This is usually in the range of one to five years. Sometimes, you can arrange to secure your interest rate for longer.

Fixing your interest rate can be a suitable option for some people, however you should be aware of the following:

  • Fixed rate home loans often have higher interest rates than variable rate home loans. Often, the longer the fixed rate term, the higher the interest rate is likely to be. For example, a five-year fixed loan will usually have a higher rate than a three-year fixed loan.
  • If interest rates do not rise, or if they fall during your fixed rate period, you could then pay more interest than you would if you had a variable rate home loan.

FIXED RATE HOME LOANS

What’s good about fixed rate home loans?

  • During times of low interest rates, locking in a fixed rate could work to your advantage, because you can retain a low rate for a fixed term even if the rates rise steeply. Depending on the lender and the current interest rate, this could potentially lower your repayments and the total interest paid over the loan term.
  • You know exactly how much your repayments will be during your fixed rate term, which can make budgeting easier.

Things to consider

  • Less Flexibility. Fixed rate loans usually do not have the same flexibility that a variable rate loan provides. For example, you may not be able to make extra repayments and un turn redraw the extra amount paid into the loan. Some lenders do allow extra repayments to be made but will restrict the extra amount that can be paid during the fixed term or on an annual basis.
  • No offset facilities. Most lenders will not allow you to have an offset account with a fixed rate loan so there is no opportunity to save on interest. Where offset facilities are available, they will usually only be available on a partial basis, with a 100% offset account being available through some lenders only.
  • Break costs. The decision to break your fixed rate loan is entirely up to you however a break cost may be applicable. Break costs may apply if:
    • you want to exit before the end of the fixed term.
      o you prepay part of or your entire loan before the end of your fixed rate period
    • you switch to another product, interest rate or payment type before the end of your fixed rate period.
    • you want to end the loan as part of selling the property.
  • Calculating break costs. Each bank uses a different formula to work out the break costs, so it’s worth finding out how your lender calculates this fee as the formula is complex. However, in general terms if the current wholesale interest rate for the remaining part of the fixed interest term is lower than the original wholesale interest rate when the fixed interest rate period started, then a Break Cost will be charged.

The rate is usually not set until settlement. Some lenders will apply the fixed rate at the loan settlement date or the date the fixed rate period commences while others will apply the fixed rate available at the time you sign your letter of offer. This may or may not work in your favour. There may be an option to lock in your fixed rate (see below), however there might be a fee from the lender for this.

  • Your decision whether to fix the interest rate on your loan should be based on your own circumstances, with your future in mind. Certainty of repayments is the best reason to fix your rate—they seldom help to beat rate rises over time.

Remember:

If variable rates increase, you may pay more interest than if you fix your rate. It will depend on the size of the increase(s), how far into the term the increase(s) occur, and how long you hold the loan after the increase(s) occur.

If variable rates stay flat or decrease, you will pay less interest than if you fix your rate. This is on the basis that your fixed rate is higher than the variable rate over the same period.

Rate Lock

Some lenders will provide you with the option of locking in the fixed rate prior to settlement occurring. This is referred to as “Rate Lock” and will involve paying a rate lock fee which will usually be calculated as a percentage of the loan amount.

This fee can be a significant amount, although some lenders will not charge a fee or may waive it. If you choose this option, then you can proceed with certainty and complete peace of mind that the decision to fix your interest rate will not move between when the rate lock is effective and the rate that would be applicable on the day of settlement.

Most people who elect to Rate Lock do so at the time the application is submitted. It can be done later in the process— however, the lender can announce a rate increase at any time before settlement and once announced the opportunity to lock in the previous rate passes. A “wait and see” approach carries with it the risk of missing out on the lowest fixed rate that could have been obtained.

If you decide to Rate Lock, make a note of the expiry date, as it will usually be in place for 90 days. If your settlement still hasn’t occurred when it expires, it will need to be renewed (including paying another fee) for it to remain in place. This can be an important consideration if you have negotiated a long settlement.

HOW TO GET STARTED

To get started, call us during business hours on 08-9433-1312 or submit an online enquiry and one of the team will review your request and schedule a time to discuss in more detail.

Doing Finance Differently

It’s what BH Brown does differently to other brokers, banks, loan supermarkets and ‘no service’ digital lenders that ensures the Success of our Clients.

We are Professional Mortgage Brokers, committed to helping Our Clients purchase homes, investment property and projects.

We can arrange construction loans, unlock “hidden equity” to invest and restructure finance for a smooth transition to retirement.

BH Brown excels in solving large, complex, multi-property and multi-entity deals and has the Reputation to prove it.

  • We deliver wealth-focused mortgage and loan advice
  • We make things happen that our clients had been told weren’t able to be done
  • We are all about relationships
  • We take it personally
  • We have every available loan option from Banks to Private Lenders
  • We employ the latest software almost eliminating paperwork and forms
  • We take responsibility and control over the transaction
  • We work for our clients with a sense of urgency
  • We do whatever it takes to make the deal happen
  • We always talk in terms of Your success
  • We Guarantee Our Service

An Impeccable Reputation

Brodie and Josie were complete professionals throughout the whole process. He and his team really do what he says they will do and provide you the best service possible.
Peta Duncan
2024-02-05
Love working with Brodie Brown and his team. Great advice and support. Make the whole process easy:)
Anne-Marie Erickson
2024-02-01
My wife and I had the pleasure of working with Brodie Brown and his exceptional team for our first investment property purchase in Perth. From the moment we engaged with Brodie, we were impressed by his professionalism, efficiency, and depth of knowledge. Brodie and his team made the entire process seamless and stress-free for us. They provided continuous touch points throughout, ensuring we were always informed and reassured that everything was proceeding according to plan. Their attention to detail and commitment to excellence truly set them apart. We are incredibly grateful for Brodie's expertise and guidance throughout this journey. His dedication to finding the best mortgage solution for us was evident in every interaction we had. We wouldn't hesitate to recommend Brodie and his team to anyone in need of a mortgage, knowing they'll be in the hands of a true industry expert.
Jon Butler
2024-02-01
It’s always a pleasure to have Brodie and the team at BH Brown manage our mortgages and finances. They have helped my partner and myself obtain mortgages, refinance, restructure and reorder to best suit our current and often changing needs. If ever we are unsure of something or have a question, just a quick phone call and one of the BH Brown team has us the answer, they never fail to offer us sound, practical and knowledgeable advice and outstanding service. Always the highest possible star rating for BHBrown Mortgage Brokers. I highly recommend them to anyone!
Chad Auth
2024-01-31
I’d been on Brodie’s email list (downloaded AND read the book!) for about 6 months, when Troy telephoned to see how we were going and if we needed anything. I didn’t know it at the time but we were actually in a prime position to refinance our new house away from Keystart! I had no idea. So that’s what we did, with no lenders mortgage insurance required to boot! Troy is very friendly, very patient (we took longer than we should have with paperwork etc…) and very professional. The whole process was very easy and pain-free, and we never felt rushed or pressured to continue until we understood things. Troy has helped us out twice now with finance. He was away on holiday the second time, poor guy, and he still helped us out with cheerfulness. Many thanks Troy!! Oh, and I know full well that Brodie’s emails are marketing, but I really do enjoy reading them and learn from them, and I recommend that you sign up to his list!
Cameron Brown
2024-01-30
Brodie and his team provide excellent service and advice, recommend them in a heartbeat.
Jason Wallis
2024-01-14
Brodie and his team were awesome they listened to our circumstances and guided us through the whole process to get the result everyone wanted thoroughly recommend to al expat kiwis because he likes his rugby aswell thanks team
Megan Michelle
2024-01-11
Did a free one off phone consult and Brodie was great in quickly assessing our situation and giving sound advice. Highly recommended.
Kevin Eipe
2024-01-10
Brodie and the team did a great job of finding me the best loan for my situation, and they made the process easy. Highly recommend.
Tim Fisher
2024-01-07
Brodie has been terrific over the last few years offering reliable property and mortgage advice. Highly recommended.
Jack Selva
2023-12-30
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