Choose Fix or variable interest rates?

This is common dilemma. Frankly, people struggle to choose right option.
According to economist’s, the status of economy is to be considered for choosing a right option. If economy is doing fine and you can access to competitive interest rates, then its right decision to fix the rates and be carefree. On the contrary people choose to fix when interest rates are already high and they fear if they can go more higher. Economy go in cycles and so are the interest rates. Rates will never keep going up and up forever.

Fixing the loan for 3 to 5 years can add a good savings in your loan. Most people fail to choose the right time period.

Its just like investing in shares, soon you invest and the share go down!

Your favorite bank vs other lenders

Banks have great tendency to attract their existing clients. Consumers are provided comparisons and banks try their best to negotiate a good rate. But remember, banks are only comparing their own products not other banks products.
Banks don’t discuss much about other banks latest offers and their customers have faith with them for banking over the years.Clients do not bother to check much with other banks and finally end having a mortgage with the same which they are using over the time.
At Echoice, we have over 40 lenders and we can negotiate on your behalf.

Fixed vs Variable interest rates

Fixed rates have their own benefits and drawbacks. Lets discuss benefits first

• Low interest rate compared to variable
• Better serviceability
• Good for investment purpose
• Peace of mind as it fits in planned budget

There few drawbacks as well such as

• Annual package fees
• Early exit fees
• Limitation for extra repayments
• Higher revert rate

We advise not to choose fixed rate if you planning to:

In some cases, Split loans can be advisable where you can have both fixed and variable under one loan amount.

Cheap fixed rate loans

Banks update their offers over certain period of time. We have plenty of lenders on our panel and can help find you the best available fixed rate. Contact us for more obligation free information.

Will interest rates go up or down?

There is some kind of information continuously hammered by the media regarding interest rates. The modern journalism and media creates the fear rather providing helpful information to people. The more people are concerned, the more business goes to big lenders. Moreover, people are more likely to click on the scary news rather than the genuine one.

Reserve Bank have a fair control over the interest rates and even Reserve Bank itself cannot predict whether the interest rate will go up or down after a year. The interest rates are reviewed by Reserve bank on every second Tuesday of the month.
There has been many wrong predictions published by the media over the years.
There are few factors which helps predicting the interest rate changes such as

• The current  and future immigration policies
• GDP
• Political scenario’s
• Taxation policies

Echoice mortgage brokers can provide you unbiased opinion. Please call us or visit us for an obligation free information session.

Fixed rates and  “rate lock”?

“Rate Lock” is term used by banks when they provide you the promised interest rate on the time of your application. If there is no Rate Lock in place and bank increases their interest rates in the mean time, you will receive latest interest rate.
Rate Lock does not come free and the fee starts from $395 to $695 or 0.15% of the loan amount . The fees varies from from lender to lender.

Please note, Rate locks may not suit all as:

• No Rate Lock for Pre-approval loans
• Rate Lock only valid for 90 days only
• Fees may not be refunded after 90 days

Fixed Rate Loans are getting Better!

Banks were very tough with their criteria on fixed rate loans. Fixed rate loans were merely introduced to get more clients rather than providing advantage to customers. There were tough penalties on not following the guidelines.

Well over the years when all lenders provide fixed rate loans, so there few features provided in common such as:

Fixed rate loan can be beneficial to some clients. Please discuss your scenario to us and we will be glad to advise you the latest industry trends and recommendations.

Fixed rate home loans and Interest in advance loans

“Interest in Advance”(IIA) loans are often advised if you looking for a fixed rate loan. The IIA has few benefits such as:

• Tax deductions
• Competitive rates
• Professional discounts
• Cash-backs and rebates from lenders

Individuals who pay high tax and have investment properties certainly can receive more benefits with such kind of loans.

Please talk to us and we can provide you more information