Neither fixed nor variable is always better. Over long periods the two tend to end up in a similar place, so the choice comes down to whether you value certainty or flexibility. A fixed rate locks in your repayments, which suits people who want to know exactly what's coming out each month. A variable rate moves with the market but is usually more flexible.

In this video, the McKern Finance team explains the trade-off, including one detail that's easy to miss: fixed loans often limit extra repayments (commonly around $10,000 a year) and may restrict or exclude offset accounts, while variable loans generally let you pay extra and use an offset without limits. If you expect extra cash to come in, that can decide it. Some borrowers split their loan to get a bit of both.

In this video

0:20 Is one better than the other?

General information only, not personal advice.