By Steve Chin - June 2026 - 7 min read
The most common type in Australia. Your interest rate moves up and down with the market - when the RBA changes the cash rate, your lender typically adjusts your rate within days. Variable loans offer the most flexibility: full offset account access, unlimited extra repayments, and the ability to refinance at any time without break costs.
Best for: borrowers who want flexibility, have an offset account strategy, or believe rates will fall.
Your rate is locked for a set period - usually 1 to 5 years. Your repayments stay the same regardless of what happens to interest rates. The trade-off is less flexibility: most fixed loans limit extra repayments (typically to $10,000-$20,000 per year), do not offer a full offset, and charge break costs if you refinance or pay off the loan early.
Best for: borrowers who need certainty, have a tight budget, or are stretching to buy and want to protect their repayments for the first few years.
Part fixed, part variable. You choose the split - 50/50, 60/40, or whatever suits you. The fixed portion gives certainty, the variable portion gives offset access and flexibility. This is the most popular structure Lendology sets up because it gives borrowers the best of both approaches.
You only pay the interest for a set period (usually 1 to 5 years), without reducing the loan balance. Your repayments are lower during the interest-only period, but you are not building equity. When the interest-only period ends, your repayments jump because you now need to pay off the principal in a shorter remaining term.
Best for: investors who want to maximise cash flow and claim the full interest as a tax deduction. Less suitable for owner-occupiers unless there is a specific short-term cash flow reason.
A flexible facility where you can draw down and repay funds up to a pre-approved limit, similar to a credit card but secured against your property. Interest is only charged on the amount you have drawn. Useful for ongoing access to equity - for example, if you are renovating in stages or investing.
The risk is that without discipline, the balance can stay high indefinitely because there is no structured repayment schedule.
A home loan is secured against your property, which means lower rates but the risk that your home is on the line. A personal loan is unsecured (or secured against a car or other asset), with higher rates but no risk to your home. For large expenses where you have equity available, the home loan rate almost always wins on total cost.
The right loan type depends on your situation, not on what is popular. Book a free chat and we will recommend the structure that actually fits your goals and budget.
In everyday language they mean the same thing. Technically, the mortgage is the legal charge over your property that secures the loan. The home loan is the money you borrow. But in Australia the terms are used interchangeably.
It depends on your priorities. Variable gives you flexibility - offset access, unlimited extra repayments, and you benefit from rate drops. Fixed gives you certainty - your repayment is locked for 1-5 years regardless of what the market does. Many borrowers split their loan to get both.
An offset account is a transaction account linked to your home loan. The balance in the offset reduces the loan amount that interest is calculated on. If you owe $500,000 and have $50,000 in your offset, you only pay interest on $450,000. It is one of the most effective ways to reduce your total interest cost.