As mortgage brokers, it is our job to find you the home loan that fits you. Whether you are a family buying in Baldivis or a downsizer buying a unit on the ocean in Rockingham, we use our knowledge, our expertise and our network of 28 lenders to find you the right home loan for your situation.

In times of low interest rates, many people opt for a fixed rate loan to lock in the low rates for up to five years. It’s an easy solution and looks like the right one for everyone, at least on the surface. However, not nearly as many people as you may think choose a fixed rate loan. In fact, after the recent RBA decision to lower the cash interest rate to another record low of 1.75%, more people are choosing variable rate loans.

Across Australia, variable rate loans rose 0.52% in May and 76.11% of all home loans written in May were variable rate loans. In WA, 78.62% of all home loans are variable rate loans. So, why is the variable rate so popular?

Many of Us Don’t Remember High Interest Rates

Interest rates have been low for a couple of years now. No matter which kind of rate people select, they know they are going to get a good bargain. In addition, some experts think the rate may go down even further and many borrowers want to take advantage of it if it does.

Rates have been low for so long that many people don’t think they are ever going to rise again. Even those who are more savvy on real estate cycles don’t seem to think that a variable rate loan will cost them more in the next five years than a fixed rate loan would.

The big factor that seems to make people choose variable rates over fixed rates is the flexibility factor. Most variable rate loans are a lot more flexible than fixed interest rate loans. You can make extra payments or pay off the home early if you sell it with no penalty on most variable rate loans. Fixed rate loans penalise you for paying your loan off early.

To learn more or to enquire about a home loan, call the mortgage brokers at Smartline Rockingham today: (08) 9527 1800.