Settlement Guide: Fixed or variable: Choosing the right home loan

When taking out a new home loan or refinancing one, you are asked to choose between a fixed-term and a variable rate loan. Both have their own unique benefits and challenges depending on your financial circumstances and personal preferences.

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Term loans remain an attractive option for many borrowers because of the stability and certainty of how much they will have to repay and are protected against potential interest rate hikes. But at the same time, if the interest rate falls, they will continue to repay the loan at a fixed rate for the remainder of the term, which will be higher than the new rate.

If you prefer a more flexible approach to your payments, then a variable loan may be a better fit for you.