Fixed Rates

Fixed loans generally allow a borrower to lock in an interest rate for a particular period of time, normally 1-5 years. Customers who choose a fixed rate get the comfort of their repayments not changing during the fixed term. Fixing an interest rate does however mean a trade off in respect of the flexibility of a loan. A fixed rate loan generally has more restrictions then a standard variable. Many fixed rate loans do not let you make extra repayments or restrict the additional repayments during the fixed period. Features such as re-draw or mortgage offset are usually not allowed during the fixed period.