In an ideal world, there might be a ‘right’ answer, but these loan options exist for a reason. Depending on your particular financial situation, lifestyle and aims for your home loan, any one of these alternatives could be right for you.
So, though we can’t give you the magic solution, we can provide you with an explanation of each type, and why you might select one.
Fixed rate home loans
Quite simply, a fixed rate home loan  offers certainty. When you take out one of these loans, the interest you pay on the loan is ‘fixed’ at a specific rate. Though this rate is higher than the market rate, it cannot change for a certain period, usually between one and five years. After this period has elapsed, you can usually apply for a new fixed period.
The advantage of a fixed rate is that you know exactly what you have to pay, for an extended period of time. This allows you to plan your finances with confidence.
Variable rate home loans
Unlike a fixed rate loan, the interest rate on a variable loan  fluctuates with the market. This means that when market interest rates are lower, so is your home loan interest. However, when market rates rise, so do your repayments.
Generally, variable home loans also offer more flexible repayment options, such as low basic variable rates and options for extra repayments.
Split fixed and variable home loans
Another available option is to split a loan, with one part of it lent at a fixed rate of interest, and the other variable. This provides a level of certainty, while allows access to flexible features not available on fixed rates loans.
Making the right decision
When you take out a home loan, it’s important that you select the one that’s right for you. At Beyond Bank  we offer a whole range of home loan options. We can discuss your individual requirements and find the one that fits you best. If you would like to discuss your choices, leave a comment below.
^Scott, State Manager SA