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You can choose to either take the loan out at a fixed or floating interest rate, or a combination of both.
Heartland Home Loans offer fixed rates for either one, two or three years. This means that the interest rate you will pay on your loan is set for the selected period. The benefit of fixed interest rate periods is that you will have set repayment amounts during that period. The disadvantage is that if the interest rate drops, you will continue to be locked in at this rate for the remainder of your fixed rate period. If you wish to repay your loan or make changes to your scheduled repayment amounts during a fixed rate period, you may be charged a fee. If you wish to do this, please get in touch to find out what fees and other amounts may be payable.
A floating rate means that the interest rate will rise and fall in line with market conditions over the period of your loan. The benefit of this is the flexibility to make extra payments without cost. Remember: a floating interest rate may rise or fall depending on market conditions which may increase or decrease your repayment amounts.
The length of time (in other words, the “term” of the loan) you give yourself to pay off your loan will impact how much you pay. Having your loan over a longer term will give you more time to pay it off, but you could end up paying more in interest. If you can afford to pay more, it is best to have it over a shorter time frame.
Also, you need to ensure you are suitably placed to pay your loan for the term length you select. If you are planning to retire during the term of your loan, you will need to be able to either continue to make repayments or have funds available to repay your loan in full.
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Yes, you can pay your loan back early by paying the full prepayment amount.
You can also repay some of your loan at any time. However, any part prepayment must not be less than any minimum prepayment amount we specify in the loan agreement (currently being $100 for a floating interest rate or $1,000 for a fixed rate loan portion). We may also charge you an administrative fee and, if a loan portion with a fixed rate is being repaid, an amount equal to the reasonable estimate of our loss arising from the part prepayment (if any).
If you want to do this, please contact us so that we can check what fees and other amounts may be payable. This may include an administrative fee and an amount to cover our loss arising from you repaying some or all of your loan early.