One of the most common questions I get asked: should I fix my home loan, or keep it variable? Here’s the honest answer: it depends on your situation. Let’s break down the difference so you can make the call with confidence.
Variable Rate
- Your repayments can go up or down as rates move
- Usually comes with more flexibility and features (like offset accounts and extra repayments)
- Good if you want the option to pay off your loan faster or need flexibility
Fixed Rate
- Your rate (and repayment) is locked in for a set period, usually 1 to 5 years
- Great for budgeting since you know exactly what’s coming out each month
- Often more restrictive, extra repayments and offset accounts may be limited or penalised
So which one’s right for you?
If certainty matters most to you (say, you’re stretching your budget and want to know exactly what you’re paying each month), fixed can bring peace of mind. If flexibility matters more, or you’re likely to make extra repayments, variable might suit better.
Plenty of people also choose to split their loan, part fixed, part variable, to get a bit of both.
There’s no one-size-fits-all answer here. It comes down to your goals, your risk comfort, and what’s happening in your life over the next few years. Happy to talk through your specific situation, no pressure, just a chat 🙂