With all the talk about interest rates, many people are looking to fix their loan rates for the next three to five years. But fixing a rate can appear problematic when settlement date is ninety days away and there is a prospect of a fixed rate rise in the interim.
Many people don’t realise that when
negotiating a loan that the fixed rate that will apply is the rate applicable
on the day of settlement rather than the day of negotiation. That’s where rate
locking comes into play.
A rate locking facility allows you to lock the fixed rate in on the day of
application, which gives great peace of mind in the current environment where
there is much uncertainty about interest rates. However, as with most financial
instruments, there are fees involved as well as terms and conditions that will
vary from lender to lender. Some institutions will allow you the flexibility to
take a lower interest rate if rates move in your favour – others won’t. Fees
applicable are likely to vary significantly.
Finding the best rate locking facility is every bit as hard as finding the best rate for your needs. Getting a mortgage broker to negotiate your locking facility on your behalf makes very good sense. A mortgage broker is able to match your specific needs to all of the variables that apply when accessing a locked rate.
If you would like to investigate locking in your fixed home loan rate and take the worry out of interest rate fluctuations give us a call to arrange an appointment with our expert broker.