The APS Benefits Group is pleased to offer home loans. Our home loans can be used to purchase a home or land or refinance an existing loan. We also offer a mortgage broking service.
To fix or not to fix your home loan? That is the question.
There are so many things to consider when you are making the decision whether or not to fix your loan interest rate. Here are some of the things to think about to help you decide.
Advantages of a fixed rate home loan:
Budgeting - You will know exactly what your repayments will be, so budgeting and planning is made easier.
Interest rate rises won't affect you - If the variable interest rate rises above that of your fixed rate, you are ahead.
Disadvantages of a fixed rate home loan:
Interest rate drops will not apply to you - If the variable interest rate falls below your fixed rate, you will not benefit.
Limits on extra repayments - Additional loan repayments are limited with fixed rate loans and repayments may be capped at a low amount or only permitted with a fee.
Redraw - A redraw facility may not be offered on a fixed rate loan.
Break fees - Fixed rate loans may have a break fee if you change or pay off your loan within the fixed period.
What about a variable loan?
If you don't fix your loan, your interest rate will move with changes in market interest rates. This means the interest rate can rise or fall over the term of your loan resulting in variations in your repayments.
Advantages of a variable rate home loan:
Extra repayments - Extra repayments are usually allowed at no extra cost, which can save you interest and pay off the loan sooner.
Switch loans - It is usually easier and cheaper to switch loans if you find a better option elsewhere if you have a variable rate home loan.
Features - Variable loans often have a redraw feature on any additional repayments or the ability to save on interest by setting up an offset account.
Disadvantages of a variable rate loan:
Budgeting - Interest rate fluctuations can make budgeting harder.
Keeping up with repayments - This can create hardship if you cannot keep up with many or rapid rises in interest rates when you aren't expecting them.
Splitting your loan - part fixed and part variable.
Another option is to combine the two methods and have a part fixed, part variable interest loan. This allows you to manage some of the risks of interest rate rises while still being able to make extra payments.
Whatever loan you decide to take out, it must be right for you. Make sure you understand the various features and fees of all of the options available to you.
A free initial interview with our financial planner and accountant is available to all applicants.
APS Benefits Group home loans are available to APS Benefits Group members and non-members, Australia wide. Contact us below to begin the application process.
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If you would like more information about APS Home Loans, please call 1300 131 809 or contact us by completing the form below: