In times of uncertainty it is a good idea to fix the rate on your loan for a period of time. Interest rates can be fixed for up to 5 years at a time. Fixing your interest rates allows you to budget for your repayments and protects you in the case of interest rate increases. A fixed rate loan is a good idea if you are financially stretched and concerned about your finances.
Generally, after a fixed rate loan expires the home loan reverts to the variable rate. You may choose to fix the loan again for another set period.
There are disadvantaes of fixing the interest rate of a home or investment loan. You will not be able to pay off your capital if you have extra funds to contribute to your loan. Some lenders will allow you to make additional payments to your loan of up to 25% of the loan balance if you are in a position to do so.