Should I make extra repayments?

Any extra repayments you do make on a basic variable home loan will actively reduce your outstanding balance. As the interest charged on your mortgage is calculated daily on your balance, this can reduce the amount of interest you pay overall. You'll be saving money on interest charges and reducing the term of your loan .

Should I fix my interest rate?

A fixed rate home loan works differently to a variable rate home loan. While your loan's interest rate is fixed, your repayments won't change. During the fixed rate term, you may be limited to the number of extra payments you're able to make before you're charged penalties. You may also find that steep break fees apply if you break out of your fixed rate term before it has expired, such as refinancing or selling your home. Many fixed rate home loans also won't allow you to redraw any additional payments you've made.

What is the current rate for a variable mortgage?

The current rate for a variable mortgage in Australia varies between lenders, but as of now, typical rates range from 5.5% to 7%. It’s a good idea to shop around and compare rates to find the best deal.

Is it better to fix or variable a mortgage?

Whether to choose a fixed or variable mortgage depends on your financial situation and risk tolerance. Fixed rates offer stability although they are inflexible, while variable rates can be cheaper in the long run. Some borrowers opt for a split loan, combining both fixed and variable rates.

What is a variable rate loan in simple terms?

A variable rate loan is a loan where the interest rate can fluctuate over time, depending on changes in the market or the lender’s base rate. This means your repayments could increase or decrease.