Finding the right home loan for you: Fixed versus variable rate

Regardless of whether you're looking into your first home loan or your fourth, the type of home loan you choose will have a bearing on your mortgage and repayment experience.

After all, there is no one perfect home loan for any given scenario. Depending on the type of investment you're making, the value of the home, your own personal financial situation and the current market trends, there are any number of different loan types available.

Each has its own pros and cons, so speaking with a financial expert will be your best course of action for finding the most suitable mortgage option for you.

However, two of the most common home loan types that you'll be likely to come across are a fixed term loan and a variable rate loan.

The main difference between the two loan types is simply how the interest rate affects the repayment schedule.

A fixed rate home loan has a set interest rate that you make with your payments for a set period of time, which is usually between three and five years. Regardless of market activity, you will be secure with this rate for the duration of this set period.

Variable rate home loans, however, have an unsecured interest rate. While this means that the amount of interest you pay on your home loan can be at the whim of changing market, it's also possible that you could end up paying less interest.

Naturally, there are a number of benefits for both. That's why it would be a good idea to contact a financial expert and discuss your personal situation, in order to figure out what home loan type suits your circumstances.