Is A Fixed Rate Home
Loan Right For You?

Pros and cons of fixed rate home loans

Choosing a fixed interest rate home loan does offer comfort and certainty over your loan repayments. But fixing your rate generally comes at the cost of less features and flexibility.

Here is what you need to know about the pros and cons before you fix your home loan.


  • Certainty that your repayments won’t change over the fixed term period.
  • If interest rates rise, you won’t have to pay more until your fixed term expires.
  • If you fix your interest rate when rates are low, you could end up saving yourself money should interest rates rise.
  • Makes budgeting easier as you know exactly how much your repayments will be.
  • Fewer loan features could cost you less.
  • You can choose the term to suit you — from one to five years.


  • Fewer home loan features. Fixed interest rates don’t usually come with features such as offset accounts or redraw.
  • Fixed rate home loans usually attract a cap on extra repayments. This may limit your ability to repay the loan quicker.
  • The fixed term will end at expiration and your loan will revert to the standard variable rate. This may go up or down during your fixed loan term.
  • It can be difficult and costly (penalty and break fees) to change your loan should you wish to refinance or sell your property during the fixed term period.

Of course, you could have the best of both worlds and split your loan. You could have the security of a fixed rate home loan plus the flexibility of a variable rate.

Your finance specialist can help identify the most suitable loan and features to suit your circumstances and needs.




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Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. © 2021