Budgeting can be hard. Trying to work out where your money is going and how much you will have to spare is stressful. Not to mention planning for unexpected costs that seem to pop up too often. So, having a fixed home loan repayment is something you know won’t change. And the fewer the surprises, the better.
Having a fixed period on your home loan gives you a set interest rate for a set length of time (usually 1-5 years). During this time the interest rate on your loan does not change. This gives you the security of knowing how much your repayments will be for that period. Which means you can create a more accurate long-term budget. Setting your repayments up as direct debits means you won’t think twice. It's important to note that if rates do change however, you may be required to pay a higher amount than others in the market.
You can start prepping by using a budget calculator to figure out how much you are spending and where you are spending it. ASIC’s MoneySmart has a handy online planner to help get you started.
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