Benefits Of A 5 Year Fixed Rate Home Loan}

Benefits Of a 5 Year Fixed Rate Home Loan

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Kimberly AshMaking a decision to buy a home, whether you are a first home buyer or looking to invest in the property market requires a lot of decision making. Choosing to fix your home loan interest rate and for how long, is one of the decision that most home buyers struggle with. With interest rates fluctuating every now and then depending on the market cycle, one can only make an educated guess on when is the right time to fix a home loan interest rate. In this article we are going to look at the benefits of fixing your home loan for a five year term.

What is a five year fixed rate home loan?

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A five year fixed rate home loan is a mortgage whose interest rate is fixed for a period of five years. At the end of the five year fixed interest term, the borrower can choose either a new fixed interest period, split the loan or go for a variable interest home loan option.

What are the benefits of fixing your home loan?

One of the major benefits of choosing a five year fixed rate home loan is the certainty that your interest rates will not fluctuate during the five year fixed term. If there is likelihood that the market may be volatile leading to an increase in the variable rates, choosing to fix your home loan cushions you against being stung by the hikes for the five year period and in some cases helps you to lock in a low interest rate.

Another benefit of fixing your home loan is the stability and peace of mind that it offers. If you are operating on a tight budget with little or no potential of income growth in the near future, choosing to fix your home loan interest rates for a five year term can be beneficial to you and your family. Armed with the knowledge and security of how much you are expected to pay on a monthly basis, planning your budget for present and near future is made easy.

Though we’ve listed a few benefits of fixing your home loan for a five year term, at the end of the day, the decision to fix your home loan and for what duration lies with you based on your lifestyle and financial situation. If you need guidance on what home loan option to go with, don’t hesitate to get in touch with one of our mortgage brokers who are readily available on phone and happy to help.

Though we’ve listed a few benefits of fixing your home loan for a five year term, at the end of the day, the decision to fix your home loan and for what duration lies with you based on your lifestyle and financial situation. If you need guidance on what home loan option to go with, don’t hesitate to get in touch with one of our mortgage brokers who are readily available on phone and happy to help.

Kimberley A is an expert property adviser and professional from North Sydney Area, Australia. She loves to write on topics like current home loan interest rates in Australia,

5 year fixed rate home loans

, etc. so that latest property and home loan updates can be shared with the buyers before making any deal.

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