The Ups and Downs of Bendigo's Fixed Rate Loan

You don't have to look hard to see that the movement of the interest rate set by the Reserve Bank gets regular coverage in newspapers, radio bulletins, TV reports and websites. Home owners are continually on edge, worrying about how an interest rate change will affect their finances. With a fixed rate home loan such as Bendigo Bank's Fixed Rate Residential Home Loan, you can rest easy knowing that the amount of your monthly repayments will not change for the period of your fixed rate term.

The Bendigo Bank Fixed Rate Residential Home Loan offers a fixed rate, calculated daily, charged monthly and payable on a weekly, fortnightly or monthly basis.

By choosing a fixed rate loan such as the one offered by Bendigo Bank, you could enjoy the security of being able to budget the exact amount of your home loan repayments, but it also means that you are not able to benefit from potential variable rate decreases. So if the interest rates fall during the term of your fixed period, you may be paying more than those with variable rate loans.

The Bendigo Bank Fixed Rate Residential Home Loan allows you to borrow up to 97% on the value of property and, up to 90% on the value of a block of land. For either option, Lenders Mortgage Insurance is required if you are borrowing over 80% of the value of the property.

Fixed loans generally offer fewer features than other loan types. For example, extra repayments are allowed with Bendigo Bank's fixed rate loan, but only up to a maximum of 20% of the principal sum. Making payments over this amount during the fixed rate term will attract a break cost. A redraw facility is also available, but at a cost of $25 per transaction.

Other fees and charges add to the overall cost of the Bendigo Bank Fixed Rate Residential Home Loan. An application fee of $150 and settlement fee of $55 are payable upfront, with additional charges for legal and valuation fees. Government fees and charges also apply, along with an optional account service fee of $8. The alternative to the optional monthly fee is a higher fixed interest rate.

With the number of mortgage products on the market, making a decision on which home loan is best suited to your financial situation can be hard work, so it's a good idea to consult a financial broker to explore your options.