What is a fixed interest rate?

Fixing interest rates doesn’t mean repairing them, but rather setting them at an agreed level for a specified time.

This is usually slightly higher than the unfixed or ‘floating’ interest rate, which can go up or down depending on where the Reserve Bank sets the rate at which other banks borrow money.

The benefits are that if you’re repaying a loan, your payments remain the same for the period over which the rate is fixed.

You pay exactly the same every month, even if the interest rate changes. Besides locking in certainty, fixing the interest rate should give you an advantage if the interest rate rises.