🏦 Fixed vs Variable Home Loans: Which One’s Right for You?

When you're applying for a mortgage orrefinancing, one of the biggest decisions you'll need to make is whether to gowith a fixed, variable, or split loan. Each option has itsadvantages — and choosing the right one can potentially save you thousands.

Let’s unpack each one in plain language soyou can make a confident, informed decision.

🔒 FixedRate Loans: Peace of Mind, Set in Stone

With a fixed rate loan, yourinterest rate is locked in for a set period — usually 1 to 5 years. That meansyour repayments stay the same regardless of what the market does.

✅ Pros:

• Predictable repayments – great for     budgeting
• Protection from rate hikes
• Peace of mind in uncertain economic     times

❌ Cons:

• Less flexibility – limited or no     ability to make extra repayments
• Break fees if you refinance or sell     during the fixed term
• You won’t benefit if rates drop

🔄Variable Rate Loans: Flexibility and Freedom

A variable rate loan means yourinterest rate can go up or down depending on the market. These loans tend tooffer more features and flexibility.

✅ Pros:

• Make unlimited extra repayments and     pay off your loan faster
• Access redraw if you’ve overpaid
• Take advantage of falling interest rates

❌ Cons:

• Higher risk – repayments can     increase if rates rise
• Less predictability – harder to     plan long-term budgets

⚖️ Split Loans:The Best of Both Worlds?

Not sure which way to go? Many borrowerschoose a split loan, where part of your loan is fixed and the other partis variable. This can offer a great balance between certainty and flexibility.

For example:

• Fix $300,000 of your $600,000 loan (stable repayments)
• Keep the other $300,000 variable (make extra repayments, access     redraw, etc.)

🧠 Which Option Is Right for You?

It really depends on your financial goals and tolerance for risk:

Ask yourself:

• Am I likely to make extra repayments?
• Will I want to refinance or sell soon?
• Can I afford potential interest rate rises?
• Is stability more important than flexibility?

💬 Need Help Deciding?

There’s no one-size-fits-all answer — andthe right choice can change based on the market, your income, and your futureplans.

As a mortgage broker, I can help you:

• Compare hundreds of loan options
• Build a custom split structure
• Choose a loan that matches your lifestyle, not just the     interest rate

📞 Getin touch today to chat about your options and find a loan strategy thatworks for you.