FIXED VS . FLOATING SPLIT
Mr Alexander ’ s thoughts are general advice only , and our team at Loan Market encourages you to seek advice tailored to your unique financial situation .
When it comes to structuring your home loan , there are a few key factors to consider .
Fixing your loan provides certainty , as your repayments stay the same for the length of the fixed term . This stability makes budgeting easier and protects you from potential interest rate rises . However , breaking a fixed-term loan early can result in break fees , and you may miss out on savings if interest rates drop further during your fixed period .
On the other hand , a floating-rate loan moves in line with market interest rates , meaning your repayments could increase or decrease over time .
One thing to keep in mind is that interest rates move in cycles . Over the course of a 30-year mortgage , rates will fluctuate , sometimes unexpectedly . That said , a well-structured loan isn ’ t just ‘ set and forget .’ A floating rate provides flexibility to make extra repayments or lump sum payments without penalty , potentially helping you pay off your loan faster and save on interest .
For many borrowers , a split-rate mortgage can offer the best of both worlds . By dividing your loan into fixed and floating portions , you can balance stability with flexibility . The fixed portion provides certainty in repayments , while the floating portion allows you to make extra payments when it suits you .
Our team of experts can calculate different repayment scenarios tailored to your situation to help you make a decision . Contact us , and we ’ ll find the right loan structure for you .
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