This choice is usually framed as a prediction about where rates are heading. It is more useful to treat it as a question about how much variability your household budget can absorb.
How a floating rate works
A floating rate is tied to a benchmark, plus a spread the lender adds for your profile. When the benchmark moves, your rate moves. Lenders usually respond by keeping the instalment steady and adjusting the tenure, though the treatment varies and is worth confirming.
The practical consequence: a rate rise may not change what leaves your account each month, but it can extend how long you are paying. That is easy to miss.
How a fixed rate works
A fixed rate holds for an agreed period. That certainty is genuinely valuable if your budget is tight or your income is variable. It usually costs something — fixed rates commonly start higher than floating ones — and many so-called fixed products are fixed only for an initial period before reverting.
Questions to ask, whichever you choose
- What benchmark is the rate tied to, and how often is it reset?
- What spread is being applied to me, and can it change during the loan?
- On a rate change, does my instalment change or my tenure?
- If fixed, for how long, and what is the reversion basis?
- What does it cost to switch between the two later?
- Are there charges for prepaying, and do they differ by rate type?
A note on comparison
Rates quoted in advertising are typically the best available to the strongest profiles. The rate offered to you depends on your credit standing, income type, loan size and the property. Treat a headline number as a starting point for a conversation, not as a quote.
We do not publish rates on this site, because any figure we printed would be out of date and would not be the rate you are offered. What we can do is talk through how a particular lender's structure would behave for your situation.