Fixed VS Variable Loans. How to decide which option is right for you?

There are 880,000 fixed home loans due to expire this year according to the RBA and many borrowers are in for a shock when their loans switch to variable and their repayments rise.

After a series of interest rate rises by the RBA over the past year, variable rates have gone up, meaning a borrower who opted for a fixed-rate loan when rates were at record lows will face higher repayments when their fixed term expires, and they roll onto variable rates.

While borrowers can choose to fix their interest rate again, fixed rates offered by lenders have risen too, and with uncertainty remaining around how high interest rates could go and when rates could be cut, there's a lot for borrowers to consider ...

For borrowers in this situation and those considering purchasing a home or refinancing this year, deciding whether to keep their interest rate variable or opt for a fixed-rate home loan is a big decision.


Fixed rate loans are those that have an interest rate set at the time of taking them out, which is locked for a set period of time (generally one to three years). If your interest rate is fixed, and the RBA raises the official interest rate during that period, you'll be paying less than others on a variable however if it goes down, then you may be missing out on a discounted rate.


The interest rate you pay with a variable rate loan changes with the cash rate. In the past, these have been far more popular than fixed rate loans but, with the rock bottom interest rates during the pandemic, almost half of borrowers taking out loans chose fixed rates.

If you fixed rate expiring this year, chat us before your expiry date so we can have a look at what options we have for you!


*Data referenced from Domain article

Home Loans
Written by Chloe Boswell
19 June, 2023
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