Choosing between fixed and floating mortgage rates is one of the most important decisions you’ll make when setting up your home loan.
What Is a Fixed Rate?
A fixed rate means your interest rate stays the same for a set period (e.g. 1–5 years).
Pros:
- Certainty with repayments
- Protection from rising rates
Cons:
- Less flexibility
- Break fees may apply
What Is a Floating Rate?
A floating rate can change at any time based on market conditions.
Pros:
- Flexibility to make extra repayments
- No break fees
Cons:
- Payments can increase if rates rise
What’s Right in 2026?
There’s no one-size-fits-all answer. It depends on:
- Your financial goals
- Risk tolerance
- Market outlook
Many borrowers choose a combination strategy, splitting their loan across fixed and floating rates.
Why Structure Matters
The way your mortgage is structured can have a major impact on:
- Interest paid over time
- Flexibility
- Financial stress
Getting the Balance Right
A good structure gives you both certainty and flexibility, tailored to your situation.
Before choosing a rate, it’s worth getting advice to ensure your mortgage is set up in the most effective way.