fixed versus variable rate loans

Is it better to have a fixed or variable rate loan in 2022?

So far this calendar year we have seen the majority of lenders increase their fixed rates significantly. Alternatively, a number of lenders have reduced their variable interest rates and with most lenders the variable rates currently available are cheaper than the fixed.

Choosing a variable home loan may provide you with a cheaper repayment for now, however you do need to take into consideration that should the bank increase the variable rate your repayment will increase.

Although fixing all or a portion of your loan now may mean that your repayment is higher, you are locking in this repayment for a set number of years which means that there will be no change to your repayment should rates rise. For some clients its worth paying more to have this certainty.

Whether it is better to have a fixed or variable rate loan is completely up to the individual to do their own risk assessment based on their own personal situation and determine how changes in the market may impact their ability to make repayments.

The benefit in working with a mortgage broker is that we get to know you personally to understand your unique circumstances so that your loan is structured to meet both your ongoing and future needs. We can explain the loan features in detail so that you can choose the best loan products and loan structure for you.

If you would like to have a chat regarding the options available to you, please call Brock or Rob on 02 9545 0444.