When financing an investment property in Brisbane, one of the biggest decisions you’ll need to make is choosing a fixed or variable interest rate loan. This choice can affect your cash flow, flexibility, and long-term strategy, so it’s important to get it right.
In this guide, we’ll break down the differences between fixed and variable investment loans, explain the pros and cons of each, and help you decide which option might suit your investment goals.
What Is a Fixed Rate Investment Loan?
A fixed-rate loan locks in your interest rate for a period, usually between one and five years. During that time, your loan repayments remain the same, regardless of what happens in the market.
This option can give you peace of mind and predictable budgeting, which is why many Brisbane investors choose it during periods of rate volatility.
What Is a Variable Rate Investment Loan?
A variable rate loan means your interest rate can go up or down over time, depending on changes in the broader market (especially the Reserve Bank of Australia’s cash rate).
While this introduces some uncertainty, it offers flexibility, especially if you want to make extra repayments or refinance without penalty.
Pros and Cons of Fixed Investment Loans
Pros:
- Predictable repayments for better budgeting
- Protection from rising interest rates
- Can be helpful for short-term certainty
Cons:
- Less flexibility (limited extra repayments or redraws)
- Break costs if you refinance or exit early
- Miss out if interest rates dropduring the fixed loan term
A fixed loan might suit investors who prefer stability or are just starting and want a clear financial structure.
Pros and Cons of Variable Investment Loans
Pros:
- More flexibility to make extra repayments or access redraw
- Easier to refinance or switch loans
- Benefit if interest rates go down
Cons:
- Repayments can increase if rates rise
Harder to budget long-term - Can lead to stress in uncertaineconomic conditions
Variable loans tend to appeal to more experienced investors, or those with multiple properties and more complex strategies.
What Are Split Loans?
Not sure which one to choose? You don’t have to pick just one.
A split loan allows you to divide your loan into two parts, one fixed and one variable. This offers a balance of security and flexibility and is quite popular among Brisbane investors who want the best of both worlds.
What Should Brisbane Investors Consider?
Choosing between fixed and variable depends on your financial goals, risk appetite, and market outlook. Here are a few Brisbane-specific considerations:
- Are you buying in a high-growth suburb? Flexibility may be useful if you plan to refinance or upgrade.
- Is rental demand strong in your area? Stable cash flow might make a variable loan manageable.
- Are you concerned about rising interest rates? Fixing your loan can offer peace of mind for a few years.
If you’re not sure where to start, our guide to how to secure an investment property loan in Brisbane walks you through the full process, from pre-approval to settlement.
Loan Features to Compare
Beyond interest rates, there are other features to consider when comparing fixed and variable investment loans:
- Offset accounts
- Redraw facilities
- Loan portability
- Interest-only options
Brisbane investors often use these features to help manage cash flow and reduce tax liability.
To get a better understanding of how these features differ between loan types, you might want to read our breakdown of investment property loans vs. owner-occupier loans.
What Other Investors Are Doing
We often get asked what most investors choose—and the truth is, it varies. Some fix their loans to play it safe, while others go variable for greater freedom. Many choose a split loan to hedge their bets.
Market trends can also influence behaviour. For example, when rates are expected to rise, we often see a spike in fixed-rate loans.
Still unsure? It’s just as essential to avoid poor decisions as it is to make the right one. That’s why we’ve listed the most common mistakes investors make when financing a property in Brisbane, so you can steer clear of them.
How a Mortgage Broker Can Help
If you're not confident choosing independently, a mortgage broker in Brisbane can assess your situation and compare fixed, variable, and split loan options from multiple lenders.
They’ll help you align your loan with your investment goals and explain the costs and features clearly. That kind of guidance can save you thousands over the life of your loan and take a lot of stress off your plate.
If you're wondering whether now is still the right time to invest, explore why many believe Brisbane is still a hotspot for property investment, even with rising interest rates.
Let’s Find the Right Fit for Your Investment Strategy
Every investor’s situation is different. What works for one may not work for another, and your chosen loan should reflect your long-term strategy, not just short-term trends.
Whether investing in your first property or growing your Brisbane portfolio, we're here to help you make informed, confident decisions.
Book your free consultation with a Brisbane mortgage expert who understands the local market and how to match you with the right loan. Call Mortgage Broker Brisbane on 1300 475 525 or enquire online here.
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