Both fixed and variable rate home loans have their pros and cons. Put your salary straight into a savings account and watch it grow, rather than disappear into your home loan?
While most mortgages have a 30-year term, there's no reason you can't pay it off quicker. But sometimes the loan you choose can impact how easy that’s going to be.
For instance, if you have a fixed-rate home loan, you can make additional repayments up to $20,000, but after that you may incur economic cost.
Variable vs. fixed rate loans
Both have their pros and cons. If you want to pay off your loan faster, you might opt for a variable rate over fixed. It's more flexible, letting you make unlimited extra repayments at no cost.
But if you have a fixed-rate loan now, you’re not stuck with it forever. Once the fixed term ends, you can roll it over to variable and make extra repayments.