Compare the rates of fixed mortgage loans over 3 years
Fixed rate home loans are increasingly popular. Compare mortgage interest rates set for three years.
Data shows that fixed rate loans now make up almost half of the total mortgage market, growing from humble beginnings just a few years ago. Indeed, banks and lenders are offering increasingly competitive interest rates on three-year fixed rate loans, and borrowers are flocking to them.
Data from the Reserve Bank also highlights a recent phenomenon where the average three-year fixed rate is now more competitive than its floating-rate counterparts.
Below is a selection of cutting edge three-year fixed rate home loan offers for homeowners and investors.
What happens after my fixed period ends?
If you’ve reached the end of your fixed loan period, congratulations first. And second, you are probably wondering what to do next.
Once the fixed period is over, a lender will usually offer you the option of resetting another rate or “reverting” to a variable rate. If no action is taken, a lender will usually automatically place you on what is called a rate of return.
A lender’s rate of return can be either its standard variable rate or another specialized interest rate. Either way, there’s a good chance this rate will be higher than what you were paying before, so the end of the fixed term can be a good time to shop around and refinance. The comparison rate for a fixed rate loan can be a good indicator of how your rate is moving – a high comparison rate can indicate a high rate of return.
Benefits of Three Year Fixed Rate Home Loans
Competitive interest rates: Some of the most competitive advertised interest rates are available on fixed rate home loans, and three-year loans seem to hit the “sweet spot” between the length of the fixed period and a competitive interest rate.
A lot of choices : There is a lot of competition in the three-year fixed space, with many lenders vying for your attention. This means that if you don’t like the look of a product, it won’t be too difficult to find another product that meets your needs.
Money back guarantee: Repayments are blocked for three years, which means they will not increase as interest rates rise in the wider market. While you can pay extra – up to a certain limit – the certainty of repayment can make budgeting easier.
Disadvantages of Fixed Three-Year Home Loans
You are blocked: As the name suggests, you are stuck. This makes refinancing more difficult if you find another product that is more competitive or that better meets your needs.
Break costs: if you decide to break a fixed rate loan before the end of the fixed term (for example, you have to sell your house), a lender will likely charge you a breakage fee, which can run into the thousands, depending on when you set it. and how long in the loan you are.
Refund restrictions: Fixed home loans usually have caps on the amount of additional repayments you can make in a year. Usually this costs around $ 10,000, but check with your individual lender.
Three-year fixed home loans can be a good opportunity to secure a competitive interest rate and have repayment certainty, but look at your personal situation to determine if such a loan is right for you.
Photo by Ilyuza Mingazova on Unsplash
The entire market was not taken into account in the selection of the above products. Instead, a smaller part of the market has been envisioned, which includes the retail products of at least the Big Four Banks, the Top 10 Customer-Owned Institutions and Australia’s largest non-banks:
Products from some vendors may not be available in all states. To be taken into account, the product and the price must be clearly published on the website of the supplier of the product.
In the interest of full disclosure, Savings.com.au, Performance Drive, and Loans.com.au are part of the Firstmac group of companies. To learn more about how Savings.com.au handles potential conflicts of interest, as well as how we are paid, please click on the links on the website.
*Comparison rate is based on a loan of $ 150,000 over 25 years. Please note that the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as raffle fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan.