Real Estate
28 October, 2025
Making Sense of Your Home Loan Choices
CHOOSING the type of interest rate that suits your needs in the current financial market is a choice that should be informed and considered. There are three main types of loans, and they each have pros and cons.
Fixed-rate loans offer certainty. Your repayment amount is locked in for an agreed period (usually one-five years). This is ideal for tight budgets, as you are protected if interest rates start to creep up.
The trade-off? If rates fall, you don’t benefit and breaking the fixed contract can result in costly fees.
Variable-rate loans offer flexibility. Your interest rate, and thus your repayment amount, fluctuates with the market and your lender’s rate decisions.
If rates drop, you save money on interest. Variable loans can offer useful features like offset accounts and redraw facilities, allowing you to save interest and pay off your loan faster. The risk is that repayments increase when rates rise.
Split loans divide your loan into two parts: one fixed for security, and one variable for flexibility and features, but it can make it difficult to manage and monitor.
There’s no ‘right’ choice and what works for you depends entirely on your risk tolerance and financial goals.
Are you prioritising certainty, or flexibility? We can walk you through the current rates from over 30 lenders and tailor a strategy – fixed, variable, or split – that is perfectly suited for your lifestyle.
- Jason Zenel, Money Quest Cairns