This type of loan offers borrowers greater stability and peace of mind depending on their own individual circumstances.  Such influences could include an already high debt level, insecurity in employment, or just wanting to know they will have some money left over every week to save.

Borrowers will be reassured and aware of their repayments for the term of the fixed rate.  At the end of the "Fixed" term, the loan will usually roll into a Standard Variable loan.

As mentioned in the 'Standard Variable' home loan, people are becoming aware of the 'combo loan'.  This provides you with security on the fixed portion of their home loan, whilst giving you the benefits of Variable Rate loan, such as the freedom to make additional repayments.

It is important to note that fixed rate loans can be quite inflexible.  The borrower will not benefit from any interest rate reductions, should they occur.  Also, these types of loans are usually quite restrictive in regards to any additional payments being made to the loan. It is also important to also take into account that should interest rates fall, borrowers are still held at the higher rate.