In the second instalment of his blog on fixed rate home loans, our Product Manager David Bryde explains how fixing your loan doesn’t mean giving up repayment flexibility.
In my last blog I talked about how you need to be careful to avoid the revert rate rort employed by some other lenders when taking out a fixed rate home loan.
Since then the Greater Building Society’s fixed loan rates have fallen even further.
Whether you should take out a fixed rate home loan will depend on your specific circumstances. They are great for people who want certainty.
One common misconception about fixed rate loans is that you lose the flexibility of being able to make extra payments and use redraw facilities.
Making extra payments to a loan with a redraw facility attached is an effective way of repaying your loan faster and saving you money.
Not all fixed rate loans are the same. While it is true that very few have a redraw facility attached to a fixed rate home loan, here at the Greater we do.
At the Greater, we do allow our fixed rate borrowers to make extra payments on their loans and we do offer free redraws (via internet banking) on fixed rate loans.
If you make more than 5% of your original loan amount in extra payments, and rates have moved against you, we may charge a pre-payment fee, but that fee only represents a portion of the cost to us in you making those payments and will always be less than the interest you save yourself.
It’s a great feature of all our loans that it will always be to your benefit to make extra payments.
Fixing your loan isn’t for everyone, but if it is we always strive to give our customers the fairest and most flexible loan products in the market.
With a Greater Building Society Fixed Rate Home Loan you not only avoid the rate revert “rort” I spoke of previously, but you can also maintain a lot of the repayment and redraw flexibility you get with a variable loan.
Have you had an experience where you had a fixed loan with another lender and after reading the fine print realised that you couldn’t make extra repayments? Get it off your chest by sharing your story below.