Disclaimer: this article was supplied by our Relationship Manager at FNB
FNB understands the importance of saving and budgeting, so you have the option to get a Fixed interest rate. In this way, you can be assured that your repayments won’t go up or down irrespective of interest charges.
This option allows you to fix an interest rate available at a specific point in time. When interest rates are on an upward trend, this option offers stability, as the rates will be fixed for a particular period. A Fixed Interest Rate is an agreement between FNB and the bondholder/s for the outstanding balance at a specific point in time, at an agreed interest rate, for an agreed term. Fixed rates are valid for 24 hours upon quote and if you choose to accept the quoted rate you will need to sign and return the Fixed Rate Variation Agreement before close of business the following day.
Who is this for?
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New or existing customers, i.e. Individuals, Joint bondholders, Close Corporations, Companies or Trusts
Features and Benefits
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You can select a contract period of 12, 18, 24, 36, 48 or 60 months
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Promotes effective financial planning, as rates are fixed for a particular period, which means that repayments are also fixed
Qualifying Criteria
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Home Loan account must be in good standing with no arrears amount reflected.
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A variation agreement must be signed by all signatories on acceptance of the option.
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The Home Loan must be registered at time of application.
Exclusions
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Building Loans (only considered on conversion to normal home loan on completion)
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Flexi Option (Customers cannot avail of flexi and fixed rate simultaneously as a fixed rate is purchased based on outstanding balance at that particular time)
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One Account
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Accounts in arrears or under debt counselling, insolvency or litigation
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Home Loan not yet registered
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Accounts which are already under cancellation at the time of application.
Fixed Rates may be utilised in conjunction with the following:
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Traditional Home Loan
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Foreign Choice
For details on these fees, please refer to the Annual Pricing Guide for details.
How do I apply?
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Call our Contact Centre on 087 730 11 44, who will provide you with the quoted fixed rate valid for 24 hours and will provide you with a variation agreement completed with your details for consideration and signing.
How does it the fixed rate work?
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The Bank does not fix the customer’s existing variable rate, a new ‘fixed rate’ is quoted taking into account the customer’s current variable rate.
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In order to lend the money to the customer, the Bank may borrow the money. This means the Bank enters a similar contract with another lender to borrow the outstanding balance at a fixed interest rate for an agreed period of time.
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If you break the contract with FNB, we still have to honour the banks contract with another lender and pay the fixed interest rate on the money we borrowed.
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As the Fixed interest rate contract is concluded at a specific time for a specific period for the outstanding balance, the bank cannot allow the customer to advance funds (such as Readvance, Flexi Option or Future Use) as this will result in an increased balance.
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This may result in the loss of revenue for the bank, as any monies advanced will not be part of the original fixed rate agreement which the bank originally agreed to with the lender.
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In summary: In order to lend the money to the customer, the Bank may borrow the money. This means the Bank enters a similar contract with another lender to borrow the outstanding balance at a fixed interest rate for an agreed period of time. If you break the contract with FNB, we still have to honour the banks contract with another lender and pay the fixed interest rate on the money we borrowed.
Fixed rate cancellation
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If customers wish to advance any funds, the fixed rate will only be cancelled after pay-out of funds, and only then can the customer enter into a new fixed rate agreement if they require same.
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