Fixed and variable loans can suit different budgets, plans and attitudes to rate changes. A split loan may combine both structures.
How fixed and variable loans differ
A fixed rate generally provides repayment certainty for an agreed period. A variable rate can change when the lender changes its pricing. A split loan fixes one portion and leaves another variable.
Features to compare
Variable loans may offer more flexibility for an offset account or redraw and extra repayments. Fixed lending may limit these features or apply conditions, so check the lender’s actual terms.
Break costs and refinancing
A fixed-rate break cost may apply if you refinance, sell or make a major change during the fixed period. Variable lending avoids that fixed-term risk but exposes repayments to rate changes. Review the refinancing guide before deciding.
Which structure may suit?
Fixed lending may appeal when predictable repayments matter. Variable lending may suit someone who values flexibility. A split structure may provide a middle path. No option is universally best, and lender policies differ.
Common questions
- Will you need an offset or substantial extra repayments?
- Could you manage repayments if rates rose?
- What are the fixed-term expiry, break-cost and refinance conditions?