Fixed or variable: Choosing the right home loan

African couple shaking hands with financial advisor

If you are borrowing more than 80 per cent of the value of the house, your lender will ask you to get a lenders mortgage insurnace. Source: Getty Images/ Ariel Skelley

A variable loan offers more flexibility and comes with redraw and offset facilities, whereas a fixed-term loan keeps the interest repayments stable during the fixed term. But if you need to break the fixed term, the extra cost may be significant.



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