Transcript

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Should I be choosing a fixed or variable rate for my home loan? The truth is, no type is better than the other. The choice depends on your unique lending needs.

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Fixed-rate Pros: you’ll follow a fixed interest rate for up to five years so you’re protected during cash rate hikes. This means you can budget your money properly because repayments will be the same.

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Fixed-rate Cons: if in the case the cash rate drops, you’ll still be paying the same interest rate, which means you’re paying above market rate. You cannot make extra repayments nor refinance

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Variable rate Pros: your interest rate follows the up and down movements of the cash rate. Should the cash rate drops, you pay less.

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Variable rate Cons: if the rate goes up even if it happens several times within a year, you pay more, but you can refinance and there are no break or exit fees.

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Still torn between these two types of loans? Speak with a mortgage broker and receive guidance on finding the home loan that best suits you.

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