Choosing between a fixed and variable rate is one of the most important decisions you'll make when selecting a mortgage. Here's what you need to know.
Variable Rate Loans
With a variable rate, your interest rate moves up and down with market conditions.
Pros:
•Often lower starting rates
•Access to offset accounts and redraw facilities
•Make unlimited extra repayments
•More flexibility to refinance
Cons:
•Repayments can increase if rates rise
•Harder to budget with changing repayments
Fixed Rate Loans
A fixed rate locks in your interest rate for a set period (typically 1–5 years).
Pros:
•Certainty — your repayments won't change
•Protection if rates increase
•Easier to budget
Cons:
•Break costs if you want to exit early
•May miss out if rates drop
•Often limited extra repayments
•Usually no offset account
Split Loans: The Best of Both
Many borrowers choose to split their loan — for example, 60% variable and 40% fixed. This gives you some rate certainty while maintaining flexibility on the variable portion.
Our Suggestion
There's no one-size-fits-all answer. The right choice depends on your financial goals, risk tolerance, and life plans. A licensed broker can model different scenarios for your specific situation. Request a free broker introduction through Mazal Mortgages.