Mortgages
Fixed vs variable home loans
Fixed and variable rates manage different risks. The right structure depends on how much certainty you want and what features you use.
Educational information — not personalised financial advice.
Fixed rates
A fixed rate locks your interest rate for an agreed period. That gives repayment certainty for the fixed term. In exchange, fixed loans often limit extra repayments, and offset or redraw features may be restricted or unavailable.
Variable rates
A variable rate can move up or down. Variable loans typically offer more flexibility: unlimited extra repayments, redraw and offset accounts are common.
Break costs
Ending a fixed rate early — by refinancing, selling or repaying the loan — can trigger a break cost. Break costs depend on market rates at the time and can be substantial or negligible.
Split loans
A split loan fixes part of the balance and leaves the rest variable, which some borrowers use to balance certainty against flexibility.
Questions worth asking
- How much repayment certainty do I want over the next few years?
- Do I plan to make significant extra repayments?
- Is there a realistic chance I sell or refinance during a fixed term?
Where this comes from: Written from publicly available Australian lending and government information. Figures change — confirm current details with the relevant lender or government source before relying on them.