Can I fix my interest rate on a progress payment loan?
Yes it is possible to fix and interest rate on a progress payment loan but this can only be done once the entire balance of the loan has been drawn down in full. Progress payments loans are often used to fund construction as they enable you to draw down your loan in instalments over the first 12 months of the loan term.
They are structured on a variable (floating) interest rate, during the draw down period, and repayments of ‘interest only’ are made on the loan balance until the approved loan amount is fully drawn down.
Only once the loan amount has been fully drawn down can you then change to a fixed interest rate.
See our guide Building your new home for more information.
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