Fixed Term Interest Rate Loan:
This type of loan is the least flexible of loan types. It offers Interest only repayment or principle and interest option. It is available for 1 year, 2 years, 3 years and 5 year terms. Each fixed term has a different interest rate. Once you lock in a fixed rate loan the interest rate is guaranteed until the expiration of the fixed term. It is not subject to economic conditions or changes in interest rates. You know exactly what your repayments are going to be for the next few years. There are usually break costs associated with this product if repaid earlier that the fixed term period.
Usually you cannot make additional repayments during the fixed rate term.
Usually reverts to or rolls over into the Variable Rate Loan at the end of the fixed rate period. It can also be rolled over into a further Fixed Term at the current prevailing interest rate.
This facility type does not have the flexibility of adding loan features as allowed with other loan types.