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One of the most common questions I get asked: should I fix my home loan, or keep it variable? The honest answer is that it depends on your situation.
If certainty matters most, say you're stretching your budget and want to know exactly what's coming out 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 split their loan, part fixed and part variable, to get a bit of both.
Variable rate
- Repayments move up or down as rates change
- More features: offset accounts, extra repayments
- Good if you want to pay the loan off faster
Fixed rate
- Rate and repayment locked for 1 to 5 years
- Easy to budget: you know what's coming out
- Extra repayments and offset may be limited
