Fixed Rate and Rate Lock FAQ’s

Making the decision to change from a variable to a fixed rate home loan can be daunting as you are locking in for up to 5 years. There are different rules that apply to fixed rates and it can get confusing.

To help clear up any confusion and help you make an informed decision we’ve compiled the most common facts, questions and answers for you below. We are more than happy to chat with you personally and answer any questions you have, simply call us on 02 4226 5555 or click here to request a call back.
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Fixed Rate Process

  1. New Customers:
    Complete our simple 3 step online home loan application
  2. Want To Lock In The Rate Before Settlement?
    To lock in the fixed rate complete the Rate Lock application form
  3. Want Part Fixed / Part Variable?
    For new customers looking for a split loan you simply need to apply online as per a regular loan. For existing customers looking to change to a part fixed / part variable split loan complete the Multi Purpose Form – Variations
  4. Send Back Completed Form(s)
    Email form(s) to or your Illawarra Home Loans consultant and they will send it to the lender. (Note: at this stage the rate is set upon receipt of the original request by Resimac)
  5. Loan variation documents will be issued to you
  6. Rate Is Locked In
    The rate will be set upon receipt by the lender of the original variation document (unless the rate lock facility has been used)

Fixed Rate FAQ’s

When Is The Rate Locked In?

  • Existing Customers:
    For variations to an existing IHL home loan, the rate is fixed/locked at the time the variation request application is received by the lender.
  • New Customers:
    For new customers the rate is locked in (fixed) upon settlement of the loan (unless Rate Lock is used).
  • Customers Using Rate Lock Product:
    The Rate Lock is applied when the lender receives the Rate Lock application and the Rate Lock fee has been charged which will occur once unconditional approval has been granted.

Offset Account:

  • Fixing An Existing Loan:
    If you have an existing offset account (linked to a variable portion), this offset can stay linked to the loan during the fixed period however, you cannot access the redraw or make additional repayments. Access will be frozen. The funds left in the offset will still continue to offset the interest during this period but cannot be added to or reduced. You will have the option to redraw the funds before the rate is fixed.
  • New Fixed Loans:
    For new customers fixing the whole loan amount an offset won’t be provided during the fixed term. However, once the fixed rate expires we can set up an offset account with the new variable rate loan.
  • Still Want The Offset Feature?
    If Offset is still to be used, the loan will need to be split.

Repayments and Redraw

  • Additional Repayments On Fixed Loan:
    Additional repayments are not allowed on the fixed portion. If you’d like the option of making additional repayments we can split your loan so you can make additional repayments to the variable portion
  • Redraw:
    As additional repayments are not permitted on the fixed loan the redraw is not applicable to the fixed portion

Cost Of Fixing Your Home Loan:

  • Customers With Existing Home Loans:
    For existing IHL customers wanting to change from a variable to a fixed rate home loan a variation cost is applied where the loan is split. Cost = $110.00
  • Rate lock fee:
    The fee is $350 for loans up to $300K and then 0.15% for loans >$300K (the $300K being the fixed amount not the loan total). Usually once the loan has been unconditionally approved and the fee has been successfully processed the rate will be locked in.

Rate Lock Option

What Is The Rate Lock Option?

Traditionally, the interest rate applying to fixed rate home loans is not guaranteed until settlement, however selecting a Rate Lock facility on any fixed rate home loan sees the interest rate ‘locked’ at the time of application for up to 60 days, delivering certainty and peace of mind for you and your family.

    1. Apply For The Rate Lock
      Complete the Rate Lock application form which is submitted to the lender by Illawarra Home Loans along with your home loan application
    2. Rate Is Locked In:
      Once the lender confirms the receipts of the Rate Lock application, payment for the Rate Lock facility will be charged to your credit card (provided on the application form). When the payment is approved the rate is locked in.
    3. Confirmation:
      You will received a confirmation letter from Illawarra Home Loans which outlines the fixed interest rate and expiry date.

    Key Information
    Fees and Charges: $350 for loans <$300,000, or 0.15% of the loan value for loans >$300,000
    Fees will be charged after receiving unconditional loan approval
    Max. Loan Amount: As per product maximum loan amounts.
    Term: Max. Rate Lock period is 60 days from when the Rate Lock fee processed. Applicants cannot “re-lock” after 60 day period has expired.
    Products: Available on all loans offering a fixed rate option

    Rate Lock FAQ’s

    What if my loan is not settled within the 60 day period?

    In the event the loan does not settle within the 60 days the rate lock facility will have expired and the fixed rate at the time of settlement will apply to the loan.

    Are there any extensions available to the 60 day period?

    No, the offer is only valid for 60 days in all cases and it will not be possible to relock the expiring/expired fixed rate.

    What if interest rates fall – can I adjust the Rate Lock?

    No, you must take the interest rate that has been ‘locked’.

    Is the Rate Lock fee refunded if the loan application does not proceed?

    No, if the loan does not progress or is withdrawn there is no refund on the Rate Lock fee. If you wish to
    submit a new application, a new Rate Lock fee will apply. Similarly, if you decide to vary the loan amount after the rate has been locked e.g. borrower wants additional cash out, this will require you to cancel the existing rate lock facility. Another rate lock facility will NOT be offered where this occurs – you will only have one opportunity to lock in a fixed rate per loan.

    We are more than happy to chat with you personally and answer any questions you have, simply call us on 02 4226 5555 or click here to request a call back.