Fixing your interest rate can help considerably.
When you are applying for a variable interest home loan, the lenders are assessing you at 8.5% (using our above example).
However, if your interest rate is fixed at 6% for three years, then some lenders will assess your repayments at the three year fixed interest rate instead of their assessment rate.
This can make a huge difference, allowing you to borrow much more!
You will need to consider that when the fixed rate expires that your loan will revert to the variable rate at that time. So you should consider this option if you expect your income to increase before the end of the fixed rate period.
If you think that serviceability may be an issue, please enquire online or call us on 1300 889 743. We can determine the best home loan suited for your situation.