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Two great reasons to fix your investment loan
Choosing a home loan for your investment property will likely be a different experience to choosing one for the home you live in – including when deciding between a fixed and variable rate.
The reason for this is that your goals as an owner occupier will typically be much different to your goals as a property investor. So, there are certain strategies that you may use on your investment loan that you may not on your owner occupied loan.
While both fixed and variable interest rates can be suitable for both investment and owner occupied home loans, the reasons behind choosing one over the over may differ.
One of the most common options for investment home loans is fixing the interest rate, largely because of two reasons:
1. Fixed rates offer more financial certainty
A fixed rate home loan has a locked-in interest rate for the duration of the fixed term (typically one to five years, but sometimes longer). This means that repayments are consistent each month, which can make it easier for investors to determine outgoing costs and profit.
After all, your investment property is exactly that – an investment. So having certainty around the cost of your repayments can allow you to manage your cashflow more easily.
2. Investor loans tend to be held for a shorter period
Many investors don’t mind paying more for a fixed rate for a short period of time because they will often have plans to sell the investment property and pay out the loan after five to 10 years. It’s not unusual for investors to fix the interest rate for most (or even all) of this period to allow for simpler management of the investment.
In contrast, owner occupiers tend to stay put in their principal place of residence for longer periods of time, and they may seek more flexibility in their home loan than what a fixed rate could offer.
Of course, what’s suitable for one property investor may not be for another, so it’s important to still consider your personal situation before deciding on what's right for you.
Additionally, fixed rate home loans tend to have higher interest rates than variable home loans, depending on the length of the fixed term and the influence of certain economic factors.
Whether a fixed rate is the right choice may depend on when you’re looking. Consider brushing up on the latest mortgage market news to help with your due diligence.
And if you’re looking for personal advice and guidance through your investment home loan application process, consider reaching out to a mortgage broker.
Compare home loans in Australia
5.99%
5.90%
$3,218
Australian Credit Licence 234945
Fees & charges apply
- 2024 Award Winner
- Special
- Owner Occupied
- Variable
- 20% min deposit
- P&I
6.01%
6.14%
$3,225
Australian Credit Licence 237879
Fees & charges apply
- Special
- Owner Occupied
- Variable
- 10% min deposit
- P&I
6.19%
6.54%
$3,280
Australian Credit Licence 234517
Fees & charges apply
- Owner Occupied
- Variable
- 40% min deposit
- P&I
6.29%
6.30%
$3,311
Australian Credit Licence 233714
Fees & charges apply
- Cashback
- Owner Occupied
- Variable
- 20% min deposit
- P&I
7.36%
7.41%
$3,650
Australian Credit Licence 230686
Fees & charges apply
- Investor
- Variable
- 10% min deposit
- P&I
7.24%
7.55%
$3,611
Australian Credit Licence 243099
Fees & charges apply
- Owner Occupied
- Variable
- 10% min deposit
- P&I
6.84%
7.16%
$3,611
Australian Credit Licence 233714
Fees & charges apply
- Owner Occupied
- Variable
- 5% min deposit
- P&I
6.23%
6.38%
$3,292
Australian Credit Licence 244616
Fees & charges apply
- Cashback
- Owner Occupied
- Variable
- 20% min deposit
- P&I
6.69%
6.70%
$3,436
Australian Credit Licence 234945
Fees & charges apply
- Owner Occupied
- Variable
- 30% min deposit
- P&I
5.99%
6.04%
$3,218
Australian Credit Licence 388053
Fees & charges apply
- 2024 Award Winner
- Owner Occupied
- Variable
- 40% min deposit
- P&I
6.19%
6.54%
$3,280
Australian Credit Licence 234517
Fees & charges apply
- Owner Occupied
- Variable
- 20% min deposit
- P&I
5.99%
6.29%
$3,218
Australian Credit Licence 388053
Fees & charges apply
- Owner Occupied
- Fixed 3 years
- 20% min deposit
- P&I
Product database updated 20 May, 2024
Promoted home loans
Variable Rate Home Loan LVR < 80%
Real Time Rating™
- 2024 Award Winner
- Special
- Owner Occupied
- Variable
Interest rate p.a.
5.99%
Comparison rate* p.a.
5.90%
Australian Credit Licence 234945
Fees & charges apply
Express Home Loan
Real Time Rating™
- Special
- Owner Occupied
- Variable
- 10% min deposit
Interest rate p.a.
6.01%
Comparison rate* p.a.
6.14%
Australian Credit Licence 237879
Fees & charges apply
AMP Bank Professional Package Home Loan (Principal and Interest) ($500k+)
Real Time Rating™
- Owner Occupied
- Variable
- 40% min deposit
- P&I
Interest rate p.a.
6.19%
Comparison rate* p.a.
6.54%
Australian Credit Licence 234517
Fees & charges apply
Basic Home Loan
Real Time Rating™
- Cashback
- Owner Occupied
- Variable
- 20% min deposit
Interest rate p.a.
6.29%
Comparison rate* p.a.
6.30%
Australian Credit Licence 233714
Fees & charges apply
Product data updated on 20 May 2024
