Choosing a home loan
Variable rate loan
Variable rate loans are mortgages where the interest rates generally move with changing economic conditions. When interest rates fall, repayments fall but when interest rates rise, so do the repayments.
The standard variable loan is often more flexible than others and comes with more features and the option to make additional payments without penalty.
Fixed interest rate loan
Fixed rate loans protect you against interest rate changes for an agreed time, so you have peace of mind knowing your repayments won’t change.
This type of loan is suitable for people who like to know exactly how much their interest rate and repayments will be for one, two or even up to five years.
You can still make extra repayments over and above your normal monthly repayments however, you won’t benefit if rates go down during the fixed term. The amount of the extra payment allowed will depend on your lender.
There are other options available, but it would be best to discuss these your bank or a Mortgage Broker.