· When rates are rising it is guaranteed that your interest rate will not go up. · You know how much your repayments will be for fixed period of the loan.

· In periods of decreasing interest rates, your interest rate will drop during the fixed term.
· Fixed loans either do not allow additional repayments without penalty or limit the amount of additional repayments, which can be made without penalty. · There can be penalties for changing from a fixed rate loan to a variable interest rate, or changing lenders, before the fixed term is over.

· If interest rates increase, you interest rate will not rise beyond its cap.
· If rates decrease, you interest rate will fall along with market rates.

· In some cases or with some institutions the variable rate that capped loans default to may be higher than standard variable rates.

· Usually the lowest interest rates available on the market.
· A reduced interest rate at the beginning helps the borrower adjust to mortgage payments.
· If payments are made at the standard variable rate the principal can be reduced quickly.
· Some banks provide an offset account on these loans.

· Payments may increase when the initial period ends.
· If you have a fixed rate and interest rates fall you could be locked into higher rates.

· It operates like a transaction account. It will often have a cheque facility, a cash card and even a credit card, which means you can access cleared funds every day.
· You can make additional repayments to your loan without incurring penalties.

· You may have to pay a premium for the flexibility of All -in - One loan, ie-monthly fee or a higher interest rate.

· Provides secure options in times of rate volatility.
· the fixed portion provides you with repayment certainty
· The variable portion provides you with repayment flexibility- you can pay off as much as you like, when you like.
· Option to link either part of your home loan to a mortgage offset account, helping to reduce the balance of your loan and providing access to cleared funds.
· You choose what proportion of the loan amount you have fixed and variable.

· The variable portion of your loan is still vulnerable to increases if rates go up.
· If interest rates drop below your fixed rate, you still have to make repayments at the high rate.

· You can use the money as you need it and pay it back when you can.
· Interest rates are usually lower than for credit cards or personal loans.
· Credit card limits are usually higher than for credit cards or personal loans.

· Unless care is shown it is possible to reduce the equity you have built up in your home.

· You can borrow up to 2.0% of purchase price to cover fees & costs
· Mortgage insurance is not required.
· Acceptance of a broad range of assessable income sources, Centrelink, Child maintenance etc.
· No monthly account fees · Ability to use gifts for deposit · Minimum deposit of 2.0% or $2,000

· Normally higher interest rate
· No added features to loan product, such as redraw & etc
· Income tested to a maximum of $60,000
· Loan repayments have to less than 31% of assessed income, or 35% total financial commitments.
· Low borrowers equity in property, difficult to refinance in early years.