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How does a fixed interest rate home loan affect balance transfer?

If you have a fixed rate home loan, the implications of doing a balance transfer are a bit different compared to a floating rate loan. For starters, you may not gain any benefits by transferring to a new fixed rate, as your current rate is locked. So, consider switching only if you can transfer to a lower fixed or floating rate.

Moreover, some fixed rate loans may charge a penalty for pre-closure before the end of the lock-in period. This can negate any savings from the balance transfer. Even if your fixed period has ended, evaluate if the new offered rates provide enough savings after accounting for transfer fees.

Sometimes, it may be feasible to transfer to a floating rate if that provides better savings compared to the existing fixed rate, even if for a short term.