Choosing between fixed and variable rates is one of the most important decisions when taking out a home or investment loan. The right choice depends on your goals, risk appetite, and financial situation. In 2025, with interest rates moving in cycles, borrowers are looking for certainty without missing out on flexibility.

Fixed rates: peace of mind
A fixed loan locks in your interest rate for a set period, usually one to five years. This means your repayments stay the same regardless of what happens to the market. Fixed loans are ideal if:

• You want predictable repayments.

• You are on a tight budget.

• You expect rates to rise further.

The downside is that fixed loans often come with restrictions. Extra repayments may be limited, redraw may not be available, and breaking the loan early can be expensive.

Variable rates: flexibility and opportunity
A variable loan moves with the market. If rates drop, your repayments go down. You can usually make unlimited extra repayments and access redraw facilities. Variable loans are ideal if:

• You want flexibility.

• You expect rates to fall.

• You plan to pay off your loan faster.

The risk is that repayments can increase if rates rise.

Splitting your loan: the best of both worlds
Many borrowers in 2025 are choosing to split their loan. This means fixing part of the loan for stability and keeping part variable for flexibility. It offers balance while reducing exposure to large rate shifts.

What to consider before choosing

• Your income stability.

• Your short-term and long-term plans.

• Your comfort level with repayment changes.

• The features you value, like offset accounts or redraw.

At MAW Money, we analyse your situation and help you structure your loan so you can manage risk while still building wealth.