What is the difference between fixed and linked interest rate?

Interest rates are an important factor in how home loans work.

A fixed interest rate remains the same throughout your home loan term.

A linked interest rate is linked to the prime lending rate (determined by the South African Reserve Bank) and will fluctuate in tandem with the prime lending rate.

Each option has its pros and cons.

For example, a fixed interest rate allows you to budget with 100% accuracy as you know what your monthly payments will be.

On the other hand, with linked interest rates, your payments will go down if the prime lending rate goes down.