In A Fix About Loan Interest Rate ? NAB's Solution Explored

New homebuyers are usually busy enough thinking about paint samples, bathroom tiles and the cost of landscaping a feature garden without having to worry about interest rate rises as well. A fixed interest loan such as the National Australia Bank Tailored Home Loan Fixed Interest Rate loan can take away the need to follow interest rate fluctuations closely, but be sure that a fixed rate loan is the right financial solution for you before you make a commitment.

While the monthly repayments for variable rate loans varies according to the interest rates set by the Reserve Bank, a fixed interest rate will not change for the term of the fixed period. The NAB Fixed Interest Rate Loan allows borrowers to budget precisely for their repayments without needing to worry about interest rate rises.

The NAB Fixed Rate loan allows homebuyers to borrow up to 100% of the value of the property, with Lenders Mortgage Insurance required for any loan amount of over 80% of the value. The period of fixed interest can be between one and ten years.

A fixed rate loan such as the one offered by NAB will protect you from any interest rate rises allowing you to lock in the amount of your repayments, but it also means you won't benefit from lower repayments if interest rates happen to fall during the period of your fixed interest.

When looking for the right loan for you, remember to look at not only the interest rate, but the features offered by any particular loan and your need to access these features. For example, with the NAB Fixed Rate Loan prepayment in full within four years of your loan term will attract an Early Exit Fee, making it harder to get out of debt sooner.

The NAB Fixed Rate loan allows homebuyers to make additional payments up to maximum of $20,000 during fixed term. Any payments over this amount during the period of fixed interest will attract prepayment fees.

A redraw facility is available with the NAB Fixed Rate Loan, but a minimum amount of $2000 applies. The application fee of $600 is higher than similar loans offered by many other lenders, and an $8 per month account maintenance fee applies.

If you're undecided about whether a fixed interest rate home loan is for you, speak to your financial broker and research all of your loan options. A split loan, with part at a fixed and part at a variable rate, means that you can rest easy knowing part of your loan is at a fixed interest rate and still make the most of any potential fluctuations of interest rates in the variable component of your loan.

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