What is the difference between Fixed and Variable Interest rates! (1)

What is the difference between Fixed and Variable Interest rates!

 

A fixed interest rate loan is a loan with an interest rate set for a fixed term, This type of loan may have fewr features than variable rate loans. Penalities may apply for repaying the loan in full, making additional repayments and or moving loans/lenders during the fixed term. Fixed loan terms are usually 2, 3 or 5 years,

A Standard Variable loan is a loan product packed with comprehensive features such as an extra repayment option. The inerest rate will go up and down depending on the market. Repayments on these loans can be interest only or principal and interest.  There is usually no penalties if you switch products, redraw extra repayments or make extra repayments,

 

Should I go with a fixed or Variable rate loan?

Well the answer is, it all depends. There are many pro's and cons to both, and everyones circumstances are different. So if you are not sure it is best to talk to your local Mortgage Choice Broker.

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