Contact Us

(02) 6061 4599


13/495-499 Dean St Albury NSW 2640

Online Enquiry

* Required fields

Fixed Vs Variable Home Loans

Posted By  
09:22 AM

Planning on buying a new home or investment property? With a range of different loans out there, it’s important to understand what you’re getting yourself into with variable or fixed interest rate loans. Both have their pros and con’s. At Humble Finance Brokers, we’re experts at finding you the perfect loan that is best aligned with your financial goals.  Let’s take a look…


Variable Home Loans

Variable interest rate loans fluctuate during the course of the repayment cycle. The interest charged on the outstanding balance is often based on what the underlying benchmark is at the time, which is known as the Federal Funds Rate (FDR).  As the market changes, well, so does your loan.

As the borrower, a variable rate loan works well if interest rates are low and continue to fall – this means your loan repayments decrease also. However, if interest rates increase, borrowers who have a variable loan will inevitably pay more with each repayment cycle. Depending on your personal situation, you can access a variety of variable interest rates to suit your needs, including payments that are combined with principal and interest.


Benefits of a Variable Rate Loan:

  • When interest rates fall, you can expect lower repayments
  • Variable loans are usually lower compared to a fixed rate loan
  • You can find a range of great introductory rates on variable loan packages


What’s not so good about a variable loan?

  • When interest rates rise, loan repayments increase
  • It can become harder to manage cashflow due to the unknown market rate changes
  • Borrowers can have difficulty meeting repayments if overcapitalized

At Humble we have access to over 40 of Australia’s leading lenders and are experts at finding our clients the best value variable loans for your individual needs. Many lenders now have different rates, discounts and borrowing criteria and it can be a challenge to navigate the home loan maze yourself, so let Humble Finance Brokers do it for you.


A fixed interest rate loan is a loan that doesn’t change for the life of the loan. If market rates rise, you have peace of mind knowing that your repayments will remain the same. Some of the factors that need to be considered when taking out a fixed loan for a specific term will include things such as the current market climate, duration of the loan and interest rate trends.

If you’re aware of interest rates rising in the future, it may be best to lock in a fixed rate at the lower rate to safeguard you from repayment increases. If you’re stuck with a fixed rate that is higher than the current variable rate, unfortunately you won’t be able to break the loan until your fixed term ends. If you choose to break your fixed loan before the end date, fees will apply according to each lender’s borrowing criteria.


Benefits of a Fixed Rate Loan:

  • Enjoy the same repayments for the duration of the loan term
  • No matter how many market fluctuations there are, it will not impact your loan repayments
  • You have the flexibility to choose a loan term that suits your needs such as 1, 3, 5 or 10 year fixed rate loans.


What’s not so good about a fixed loan?

  • Contract terms are more rigid with fixed rate loans with less room to move
  • Fixed rates stay the same even when interest rates fall below market rates
  • Fixed rate loans tend to cost you more over the life of the loan compared variable rate loans.


In closing, which one is best for you – A Fixed or Variable Rate Loan?

At Humble Finance Brokers, we can help determine which loan is best for you based on your individual situation. We’ll look at things like your cash flow, repayment capacity and perhaps consider a loan that combines both a variable and fixed rate option. We take pride in understanding your financial goals and helping you achieve your property dreams faster.

Book an appointment with one of our mortgage brokers today on (02) 6061 4599 or email: with your enquiry.