Sometimes you just want a bit of certainty in life. That’s what you get with a fixed rate home loan – the confidence of knowing exactly how much your regular mortgage repayments will be. No change in interest rates during your fixed term and no surprises.
Benefits at a glance
Interest rates are subject to change.
Budget with certainty, as you’ll know what your repayments will be
Lock in an interest rate for terms from six months to five years
Some flexibility – you can make extra payments each year of up to 5% of what your loan amount is when the fixed interest rate term starts
If interest rates rise during the term of your fixed loan, you won’t be affected
Fixing for a set amount of time
With a fixed rate home loan, you sign up to a fixed interest rate on your mortgage for a set amount of time. So even if interest rates rise, your payments stay the same because you’ve locked in your rate. However, the same is true if interest rates fall – you won’t be able to take advantage of lower rates – unless you’re willing to break out of your fixed rate, which may involve paying a fixed rate break cost.
Watch the video below to understand the basics of a fixed rate home loan.
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Making extra repayments
There's still wiggle room with a fixed rate mortgage. You can make extra repayments in any year of a fixed term loan of up to 5% of the loan amount at the start of the fixed term.
You can do this by increasing your regular repayments or making lump sum payments.
- If you want to make a lump sum repayment of more than the 5% extra, you could be charged a lump sum repayment fee and potentially also a fixed rate break cost.
- If you want the option to make extra repayments, you might be better to keep part of your loan on a variable rate – you can make extra repayments on this part whenever you like.
To make an extra payment or change your regular payments, send us a secure mail or contact our home loan team on 0800 000 654.
When the fixed term is up
When your fixed term is coming to an end, you can:
- Re-fix your home loan via internet banking, our mobile app or calling our home loan team on 0800 000 654; or
- Change your fixed term to a variable or offset mortgage. If you'd like to change to an offset mortgage, you'll need to either send us a secure mail or call 0800 000 654 as it can't be done via internet banking or our mobile app.
You can refix your home loan up to 30 days in advance of your current fixed term expiring.
If you don't refix your home loan at the end of your fixed term, it will automatically roll on to a variable interest rate.
Mix it up
You don’t have to go all in on a fixed rate mortgage. You could have the benefit of both fixed and variable home loans, by putting part of your home loan on a fixed rate – giving you certainty about how much you’ll be paying on that amount for a set time – and part of it on a floating rate – giving you the flexibility to make higher payments if you’d like. Or, you could take more than one fixed term.
Breaking a fixed rate term
If for any reason you decide you want to break your fixed rate contract – say for example, interest rates are falling and you want to try to get a better rate, or you come into some money and want to pay the loan off, or you get a pay rise and want to make extra repayments over the 5% annual limit – you may have to pay a fixed rate break cost.
Talk to a home loan expert - we're here to help
If you want to chat about your home loan options, get in touch with one of our home loan experts. Our Mobile Mortgage Managers can meet you wherever suits you, or if you’d prefer to come into a branch you can make an appointment with one of our Banking Consultants.
Our home loan team is also available by calling 0800 000 654 between 8am and 6pm, Monday to Friday.
Get the right home loan for you
Interest rates are subject to change.
Standard terms and conditions
The calculators should be treated as a guide only. They don't take into account all of your individual circumstances and are not financial advice.
Displayed interest rates subject to change. Kiwibank’s lending criteria, terms and conditions and fees apply.