Which is right for you, Fixed or variable home loans?

When taking out a home loan, one of the biggest decisions you’ll need to make is what type of loan to take out. Always consult your broker, this is what I do any time I want to take up a loan.
Fixed and variable interest rate home loans both offer unique advantages and certain conditions that can impact your decision, depending on your personal and financial circumstances.
Here are some of the key factors to consider when working out which type of home loan is right for you

Advantages of a fixed rate home loan

The main advantage of a Fixed Rate Home Loan is certainty. With CommBank Fixed Rate Home Loans, when the fixed term ends your loan will usually automatically roll over to the applicable standard variable rate, or you can choose to refix your home loan.

Things to consider about a fixed rate home loan

A fixed rate home loan is not as flexible as a home loan with a variable rate.

Advantages of a variable rate home loan

With a variable rate loan, your interest rate can rise or fall throughout the term of the loan. The interest rate a bank offers can be affected by a number of factors, including in part the official cash rate set by the Reserve Bank of Australia as well as higher or lower funding costs for the lender.

Key points:

  • With CommBank variable rate home loans I can make unlimited additional repayments to finish off my mortgage sooner than later.
  • You can also make unlimited redraws on any additional repayments you’ve made, fee-free on most CommBank home loans (excludes loans with a subsequent mortgage to another lender and Economiser / 3 Year Economiser Interest Only Home Loans for the life of the loan)
  • Enjoy full interest offset benefits when you open an Everyday Offset account, which may help you save on the interest you pay. Full offset means that interest is not charged on the part of the home loan balance equal to the balance of the Everyday Offset. I applied for the type of account when I obtained my investment loans for the new apartments in the Grove, Brunswick West, Melbourne

Splitting your loan

This means you have the certainty of a fixed rate on part of your loan as well as the flexibility to make extra repayments on the variable rate part of your loan.

One of our lending experts can help your work out if this option is right for you. You can make an appointment online or by contacting me at any time.

We’re here to help
Get guidance from start to finish on your home buying journey with the support of one of our expert lenders and business partner, EK Capital. Book a time with our Lending Specialist, instantly.


Author : Charles Vincent Kaluwasha

Founder and CEO of C J Investiment. Charles Kaluwasha is a real estate entrepreneur and developer, specializing in building 2-5 unit properties in Melbourne City and Gold Coast. He currently owns 3 investment properties. He has rehabbed, Flipped and/or lease-optioned over 3 single-family residences using funds from private investors. He has secured 2 investment apartments in Melbourne and Gold Coast to be completed early 2020. A developer of C J Academy/mentorship program helping investors and homeowners with basic and advanced financial education and real estate investing strategies to create passive wealth.


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