How does a fixed rate home loan work?
What is a fixed rate lock fee?
This is the fee to lock in an interest rate on your fixed loan. The rate is locked in for a period of up to 90 days from the date of application.
How do I lock in a rate on my fixed loan?
Tick the ‘fixed rate lock fee’ box on your loan application or advise a staff member.
How do I pay the fee?
The fee is added to the loan and disclosed in your offer and loan contract.
What happens if I do not lock the rate in at the time of application?
You can lock the rate in any time up to 90 days from date of application. If your settlement takes longer than 90 days, the rate will no longer be locked and you will still have to pay the rate lock fee.
For example: you apply for a 3 year fixed loan with 6.00% pa on 1st April and don’t take up the fixed rate lock option. On the 1st June, the rate is increased to 6.15% pa. At this point, you request that the rate be locked. The rate will be locked at 6.15% pa but only until 1st July (90 days from application). If your loan does not settle by 1st July, you’ll still be required to pay the rate lock fee at settlement.
What happens if fixed rates go down?
The lower interest rate will be applied on the day of settlement but the fee is payable regardless of rate movements.
Can I lock the rate in when switching to a fixed rate product?
No. The rate lock option only applies to new loan applications.