What is a fixed rate loan?

A fixed rate home loan provides peace of mind knowing that your loan repayments will be charged at the same interest rate for the course of the fixed rate term.

Can I make extra repayments?

Generally you cannot make any additional repayments during a fixed term, however this can vary from lender to lender. If your lender lets you make additional repayments, they may be capped to a lower amount.

What happens when my fixed term is up?

After your fixed rate term has ended (usually 1-5 years) your loan will automatically transition over to a variable rate loan, unless you elect to extend the fixed rate term.

What if interest rates change?

A fixed rate home loan will not benefit from any rate drops for the duration of the fixed term. Your repayments will be the same, and if interest rates rise you’ll be protected from the higher repayments.

What should I choose?

This will depend on your financial situation and preference. A fixed rate loan offers certainty, while a variable rate loan offers flexibility. Splitting the loan is another option if you’re having trouble deciding between the two.


What is a variable rate loan?

A variable rate home loan offers more flexibility than a fixed rate loan. Most lenders will allow you to make additional repayments to pay off your loan faster, these additional repayments may also be redrawn if the need arises.

Will I get any bells & whistles?

Many variable rate loans will come with an offset account feature which can help you reduce the amount of interest you pay towards the loan. Having an Offset will help provide an accessible buffer should your financial situation change, while still giving you access to your money through a debit card.

What if rates go up?

If you have a variable rate home loan, your interest rate can go up and down so it’s a good idea to consider if you can afford the higher repayments should your interest rate jump.

What about loan splitting?

If you can’t decide between a fixed or variable rate loan, you may be able to split the loan. This means that you can assign a specific portion to a variable home loan and what’s left can be assigned to a fixed rate home loan.