How to lock your home loan into a fixed rate.

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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.

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The website provides general advice only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

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