Fixed rate and variable rate home loans

Interest rates can change regularly or stay steady, depending on the economy at the time.

Choosing a fixed or variable interest rate home loan can help you reduce interest charges over the life of your home loan.

It is useful to check from time to time if you are better off with a fixed interest rate for your home loan, a variable interest rate home loan, or a combination of both.

Here are some questions to ask yourself to help with your decision:

What do I want/need from my home loan in the short to medium term?
What is the difference between fixed home loan rates and variable home loan rates?
Which home loan/s in today’s market will suit my situation?
How flexible are different fixed and variable home loans?
What interest rates are currently available from a wide range of lenders?
What are the costs for different fixed rate and variable rate home loans? How do they compare over a certain period of time?
Are there special home loan offers available in the market?

Variable interest rate home loans

Variable home loan rates give you flexibility with the added benefit of extra features that save you money. A variable interest rate home loan is affected by economic conditions both within New Zealand and around the world, so you can expect your home loan repayments to rise and fall over the term of your loan.

Fixed interest rate home loans

Fixed home loan rates provide you with the assurance of a set home loan repayment amount for a pre-determined period of time. A good mortgage adviser will help you determine what length the fixed term should be on your home loan, based on your financial situation and your personal preferences.

When should I fix versus going variable?

Many consumers are unaware that the variable rates move differently to fixed rates and by the time variable rates have bottomed they have missed the best opportunity to secure a fixed home loan rate.

Split loans

Combination or split home loans give you the interest rate security of a fixed rate home loan with the flexibility of a variable rate home loan in one home loan, allowing you to save money over the term of your loan.