How do fixed interest rate home loans work?

• The interest rate can be fixed for a set period (we offer six months to five years) and may be rolled over at the end of that period. However, the interest rate then will depend on the rates at that time.
• At the end of the fixed interest rate period, you can make a lump sum repayment for no fee.
• You can split your loan into a number of different fixed interest rate loans (for example, you can have a portion of your borrowing on a two year period and a portion on a five year period).
• You can choose straight line, interest only or table repayments.

Benefit of fixed interest rate home loans

• Certainty – you know exactly what your repayment will be for the entire fixed rate period, so it’s much easier to budget for and you don’t have to worry about interest rate movements.

What happens if you want to repay all or part of your loan early?

During your fixed interest rate period, you can make a lump sum payment or increase your repayments by up to 5% per year of the outstanding loan balance for an administration fee of $100.

However, if you repay more than 5% per year of the outstanding loan balance before the end of the fixed interest rate term, an administration fee of $250 applies. In addition, you may also need to pay an Early Repayment Recovery charge.

This charge is to recover the loss the Bank incurs as a result of you ‘breaking’ the Fixed Interest Rate agreement early (i.e. before the end of the fixed interest rate term). Find out more about the Early Repayment Recovery charge, why it applies and how it is calculated (including examples).

Reserving a fixed interest rate

If you’re interested in a fixed interest rate home loan and you think interest rates may rise, you can reserve a current rate by signing a Reserved Rate Agreement, for no fee.

For a new loan, you can reserve a fixed rate up to 60 days before the drawdown date and for an existing loan, you can reserve a rate up to 30 days before your existing rate is due to expire.

Please note: the Bank incurs costs in holding an interest rate for you in this way, so if you cancel or change a Reserved Rate Agreement a Non-Utilisation Recovery charge applies.  Refer to our fees for more information.

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The content on our site is for information only. You should obtain professional advice relevant to your circumstances. Our lending criteria, terms, conditions and fees apply to all loans. Contact us for more details.

For borrowing over 80% of a property’s value, a Low Equity Premium on a graduated scale will apply.