Should you choose a fixed, variable or split loan?

When you are opting for a home loan, you will need to consider different options. Finding the perfect option for a home loan can be tough, especially considering the interest rate. This is mostly because your interest is lower even by 0.5%, it can help you save significant dollars. 

The independent mortgage broker Brisbane can however be helpful for you. It is necessary to compare the different loan options such as variable, fixed and loan. 

What is a fixed home loan? 

Popularly known as the fixed-rate home loan, this is one of the most opted ones. This is mostly because the interest rate is unchanged and comes with fixed terms and conditions. The interest rate is usually locked to be the same for a certain period depending on the loan amount and lender’s product offering.

After the end of tenure, you can consider changing the home loan type. Depending on your requirement, you can switch to a variable interest rate. The independent mortgage broker Brisbane can further help you crack the right deal. 

Why opt for a fixed home loan? 

Choosing a fixed home loan over others can offer several advantages. One of the main benefits is that it will allow you to manage your budget properly. Moreover, it will also help to prevent the risk of higher monthly repayment because the interest rate  is fixed. 

What is the variable home loan? 

The variable home loan usually stands for the variable rate home loan. This type of home loan may see a variety in the interest rates that you pay over the years. Depending on various situations, the interest rate will either increase or go down. 

If you are choosing a variable home loan, the banks will consider different factors. It is necessary to understand the nature of funding to get the benefits. Furthermore, the lender will closely analyze the market condition to determine that you get extra benefits. 

Benefits of variable home loans

If the interest rate drops at a particular point, you are likely to benefit from the low-interest rates. Furthermore, depending on the requirement, you can also opt for additional repayment thereby preventing the risk of penalty. 

With the help of variable home loans, you will also have the benefit of a redraw facility. This will be exclusive for the offset accounts especially for linking the accounts. The interest rate payable will eventually reduce after a certain point in time. 

What is a split-rate home loan? 

If you want the best of both worlds, variable and fixed interest rates, then you should consider opting for a split-rate home loan. As a result, you will need to opt for minimum monthly repayment. 

You can split the home loan to get the extra benefits. It will provide you the flexibility of paying at a certain point in time. Furthermore, it will also help you manage your finances. 

Determining which type of loan is the best is more of personal preference. The independent mortgage broker Brisbane at Vlend can however be of great help for managing the finances. If you want to opt for loans, we can assist you in the process. Get in touch with us to know more about our services. 

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