Fixed-rate home loans 'provide security through predictability'

Having fixed-rate home loans is an effective way for Aussies to work out exactly how much they will need to pay on their mortgages each year, an expert has noted.

In an article for the Sydney Morning Herald, author of Smarter Property Investment Peter Cerexhe noted that those renting out rooms in their home might need to budget for a period of time when there is no money coming in from this source, whether through a lack of a tenant or one who has defaulted.

He suggested that people plan for a period each year in which this happens and said a fixed-rate loan can help with this.

Those who compare home loans online looking for one of these mortgages may find a fixed-rate loan is "another form of insurance", he added.

"It gives you the security of knowing precisely how much you have to pay your lender each month," Mr Cerexhe explained.

Those looking to get their first home loans were recently advised by Dean Rushton, chief operating officer of Loan Market, to try to save up at least a five per cent deposit, reported the AAP.

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