When rates are moving around, it’s normal to wonder whether you should fix your home loan or keep it variable. There’s no one-size-fits-all answer — but understanding the pros and cons makes the decision much easier.
Here’s a simple breakdown to help you decide what’s right for you.
1. What fixing your home loan actually means
When you fix your loan, your interest rate stays the same for a set period — usually 1, 2, 3 or 5 years.
That means your repayments stay the same too.
People often choose a fixed rate for:
- Stability
- Predictability
- Protection from rate rises
But it also comes with some limits — so it’s important to know both sides.
2. Pros of a fixed home loan
Here’s where fixing can be a good call:
✔️ Your repayments stay the same — No surprises. No rate hikes. You know exactly what you’re paying each month.
✔️ Great if you’re budgeting or saving — If you’re building a home, planning for kids, or managing tight finances, fixed rates can make life easier.
✔️ Peace of mind during uncertain interest rate periods — If rates go up, you’re protected. Your repayments don’t change.
3. Cons of a fixed home loan
A fixed loan isn’t perfect — here’s what to watch for:
❌ Limited flexibility — Extra repayments are usually capped, and offset accounts often aren’t allowed (or only partial).
❌ Break fees can be massive — If you refinance, sell your home, or pay off the loan early, the break costs can be thousands.
❌ You miss out if rates drop — If the market shifts and rates fall, your repayments stay at the fixed rate — even if cheaper options appear.
4. So… should you fix your home loan?
It depends on what matters most to you:
Choose fixed if you want:- Stability
- Predictable repayments
- Protection from future rate rises
- Flexibility
- Low or no break costs
- The ability to make unlimited extra repayments or use offsets
Or consider a split loan — part fixed, part variable — for a bit of both.
At the end of the day, the right choice depends on your goals, your budget, and what gives you the most confidence moving forward.
If you want personalised guidance on what rate type fits your situation, our brokers at Simplii Finance help you compare your options and understand what’s best for you.
