Fixed or floating mortgage? Start with your plans

Choosing a mortgage structure is not just a prediction about the next interest-rate move. It is a decision about the certainty and flexibility you need while repaying a long-term debt.

What fixed and floating change

A fixed rate applies for an agreed period, which helps with budgeting. A floating rate can change and usually offers more repayment flexibility. Early repayment restrictions and charges depend on the loan contract; check them before assuming you can move or repay without cost.

The fixed-rate period is different from the overall loan term. Fixing for a shorter period does not mean the whole mortgage must be repaid at its expiry.

Map decisions you already know about

List likely events over the next few years: moving, parental leave, a renovation, a bonus or a change in employment. A household expecting a lump sum may value different features from one prioritising an unchanging payment. Do not borrow more simply because one structure produces a lower initial payment.

Consider a split without assuming it is better

Dividing the loan can give different portions different repayment features or expiry dates. It also creates more dates to manage and can complicate a future lender switch. Ask for a simple written schedule showing each balance, payment, rate period and any relevant fees.

Compare like for like

• Use the same total balance and remaining loan term.
• Check repayments under more than one rate scenario.
• Identify the cost of planned extra payments or an early move.
• Keep an emergency buffer outside the decision.

Our home loan service can help you compare structures. If an existing fixed period is ending, use the refix checklist to prepare the discussion.