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Q: When finalising the details of my home loan, should I opt for a fixed or variable interest rate?

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A: Homeowners and new home buyers need to explore the pros and cons of opting for a fixed interest rate versus a variable interest rate.

A: Homeowners and new home buyers need to explore the pros and cons of opting for a fixed interest rate versus a variable interest rate. A fixed rate remains unchanged even if interest rates change, while a variable rate follows the rates adjustments made by your bank following Reserve Bank announcements.

The disadvantage of a fixed rate is that you may miss out on savings when rates are cut. On the other hand, a variable rate may be costly if the Reserve Bank maintains high interest rates over a prolonged period. – John Manyike, head of financial education at Old Mutual

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