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Fixed rate home loans: The Pros & Cons

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Fixed rate home loans: The Pros & Cons.

While in the past most people will typically look to take out a variable home loan, in the past 12 months we have seen record numbers taking out fixed home loans. In these unprecedented Covid-times it is first worth considering what might happen with interest rates in the future and whether that means you should think about a fixed-rate home loan.

A fixed-rate home loan simply means that the interest rate on the home loan is fixed for a certain period of time. For most fixed-rate home loans, that is going to be around two to five years.

However, there are a number of other factors that you need to consider apart from just the fixed interest rate.

Finally, it’s also worth noting that actual rates that come with fixed-rate loans are often a reflection of where banks and lenders believe interest rates are headed. If fixed-rate loans have higher interest rates than comparable variable rates, it suggests lenders believe rates will rise. Even if you take out a fixed-rate home loan, your repayments might still end up being more, even if interest rates and your repayments would have risen with a variable home loan.

How we can help.

If you like the idea of having some certainty, but you’re still not convinced about a fixed-rate home loan, then it is possible to fix a portion of your loan. That way you can get the best of both worlds.

Our in-house mortgage broking service makes your mortgage and lending needs so much easier, minimising the discord between accountant, lender and product advice. We'd love to help you find the best loan for your needs.

Speak to our mortgage broker.


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