When it comes to phone plans or petrol prices we generally are very vigilant to make sure that we’re getting the best deal.  How much more should we be making sure that the one of the biggest investments of our lives is not costing us more than it should?

One of the biggest decisions through the life of a Home Loan is having the loan set as a variable or fixed interest rate.  With the current financial conditions, we are seeing lenders moving their longer term fixed rate down.  This tends to keep downward pressure on the shorter term fixed rates i.e. 2-3 years.

Fixing is a gamble – you are hoping to protect yourself from an interest rate that is higher down the track.

The current movements in the 4-5y fixed rates that lenders are offering, are under some variable rates on offer. This indicates that the variable isn’t expected to increase anytime quickly.

What does that mean for you? Should you fix now? Keep it Variable or Split the loan and hedge your bets.

 Know Thyself

When considering fixing a loan, ask yourself what is important to you and what are your priorities.  Do you value flexibility, or do you want the security of set repayments.  What are your longer term financial goals and what are changes that could happen down the track. i.e. children, study, retirement, career change.  Sitting down with someone that can ask you the right questions will help you make an informed choice.


  • Your payments will not change from month to month
  • If rates increase you’re laughing
  • Even if rates don’t move your still laughing as the fixed rates are currently under the typical variable rate


  • If the rates drop lower than your fixed you are paying more than you might have, hence the gamble
  • If you circumstances change you may be restricted by the loan.
  • Additional repayments – there are limitations in allowable additional repayment

As always, important decisions such as this, are best made with the advice of a qualified Credit Adviser.  Want a Free Home Loan Review?  Contact us on 83841993