Picking between fixed and variable is essentially placing a bet on interest rates — for 20 to 30 years. Knowing what you're betting on helps.
There is a lot of jargon around this one. Strip it away and the math is genuinely simple. Picking between fixed and variable is essentially placing a bet on interest rates — for 20 to 30 years. Knowing what you're betting on helps.
Your interest rate, monthly payment and amortisation. Inflation can still erode the value of your payment over time, but the dollar amount is predictable.
Rate is benchmarked to a central-bank index plus a margin. Up or down each cycle. Lower today, riskier tomorrow.
If your variable rate is 1% below the fixed rate, you save real money — until rates rise. Model 1, 2 and 3 percentage-point hikes before signing.
First-time buyers, single-income households, anyone whose budget cannot absorb a 25% payment jump.
High-income borrowers with cash buffers, shorter expected hold periods, refinancers who plan to break early anyway.
Can I switch later? Usually yes — sometimes with a fee. Conversion clauses are negotiable at signing.
What about hybrid mortgages? Fixed for the first 5–10 years, then variable. Good if you'll move before the variable phase kicks in.
Bookmark the calculator linked above — you will need it more often than you think.