Bank of Queensland Flex Their Fixed Rate Loan

Does talk of interest rate rises send chills down your spine? With a fixed rate loan, you can have some control over the rate of interest you pay on your home loan and know exactly what your repayments will be for the fixed period.

A fixed rate loan offers an unchanging interest rate that is generally locked in for a period of between one and five years. Bank of Queensland offer this standard option of a one to five year fixed rate and after this time the loan converts to the relevant Standard Variable Housing Loan Rate.

The monthly repayments for those with variable rate loans will fluctuate according to interest rate changes, but a fixed interest rate, and therefore the monthly repayments, will not change for the term of the fixed period.

For borrowers who like to be able to keep a tight budget, the advantage of a fixed interest rate as offered by Bank of Queensland is that they will know exactly what their repayments will be for the term of the fixed rate.

The disadvantage of a fixed rate loan? If interest rates fall during the fixed period, your interest rate may be higher than the variable rates available. A fixed rate may protect you from any interest rate rises, but it also means you won't benefit from lower repayments should interest rates fall during the period of your fixed interest.

Can a fixed loan be flexible? We think so. Bank of Queensland's website claim really depends on what you consider to be flexible. For example, a redraw facility is not available with the fixed rate loan, so the loan doesn't offer the flexibility to access extra cash.

The application fee for the Bank of Queensland's Fixed Rate Home Loan is $495 and an ongoing service fee of $8 per month applies.

Repayments can be made on a weekly, fortnightly or monthly basis. Additional repayments can be made, but only up to a maximum of $5,000 each year, so you couldn't take advantage of the fixed rate to pay off the total amount of your loan any sooner.

When exploring your home loan options, remember to look at not only the interest rate, but the features offered by any particular loan and your need to access these features.