The fixed vs variable question comes up in almost every client conversation. The right answer depends on your situation, your goals, and your tolerance for rate movement.
A fixed rate locks your repayments for a set period — typically 1 to 5 years. The main benefit is certainty. The trade-off is flexibility — fixed loans typically have significant break costs if you need to refinance or sell during the fixed period.
A variable rate moves with the market. Most variable loans allow unlimited extra repayments, full offset accounts, and the flexibility to refinance or sell without break costs. The trade-off is that repayments can increase if rates rise.
In the current environment, most of our clients are choosing variable rates or short-term fixed periods of 1-2 years. With rate movements anticipated, locking in a longer fixed term carries risk.
A split loan lets you fix part of your loan and keep part on variable. This gives you certainty on part of your repayments while retaining flexibility on the rest.