Beginner's Guide to Fixed Rate Investment Loans

A fixed rate investment loan suits you when certainty matters more to you than flexibility. What counts as certainty changes as your income, debts and goals change.

This guide is for Broadbeach investors deciding whether to lock in repayments, and for how long. We will keep it quick and direct, and we will be upfront about the costs as well as the benefits.

What Is a Fixed Rate Investment Loan?

A fixed rate investment loan holds your interest rate steady for an agreed term, so your repayments stay the same during that period. The trade-off is that you give up some flexibility. Features like extra repayments, offset accounts and redraw can be limited on fixed portions, and break costs may apply if you exit early. These terms vary by lender, so check them before you commit.

A variable rate moves with the lender's pricing, which means repayments can rise or fall. Many investors split the loan, fixing one part and leaving the other variable. That gives some certainty and some flexibility. The right mix depends on your cash flow, not on a guess about where rates are heading.

If you want a wider view of structures, our investment loans page covers the main options.

Fixed Rate Investment Loans in Your 30s and 40s

In your 30s and 40s, a fixed rate protects your cash flow while you are building a portfolio and often carrying a home loan as well. Predictable repayments make it easier to plan around school fees, a growing family and the next purchase.

As an example, consider an investor buying an apartment in Broadbeach with a $600,000 investment loan. They fix the rate for three years on an interest-only basis, within a five-year interest-only period. At an illustrative rate of 6.75% p.a., the repayment is $3,375 a month. A 30-year principal and interest loan at the same illustrative rate would be about $3,892 a month. The lower repayment frees up about $517 a month while the investor builds their buffer.

The catch is what comes after. When the five years end, the loan moves to principal and interest over the remaining 25 years. At the same illustrative rate, that repayment is about $4,145 a month, roughly $770 more than the interest-only figure. The interest-only period did not reduce the debt, and it did not raise how much the investor could borrow. Lenders assess interest-only loans on the shorter principal and interest term that follows, so borrowing capacity is not boosted.

The investor's outcome was positive because they planned for the step-up from day one. They kept the extra $517 a month in reserve instead of spending it, and they reviewed the loan before the fixed term ended.

How Does Rental Income Affect Your Investor Borrowing?

Lenders generally count only part of your expected rent when they assess your loan. APRA's guidance says prudent lenders apply a minimum 20% haircut, so no more than 80% of expected rent is counted. That allows for periods when the property is vacant.

This matters when you fix. A fixed repayment is only comfortable if your rent, your income and your buffer cover it with room to spare. Lenders also test new borrowers at a rate at least 3 percentage points above the loan rate. Our borrowing capacity page explains how these checks affect the investment loan amount you can reach.

Apartment owners should also allow for body corporate levies, which sit outside the loan repayment but affect the cash flow you need to cover it.

Fixed Rate Loans in Your 50s: Planning for Retirement Income

In your 50s, a fixed rate can lock in repayments at a time when you want certainty about cash flow before retirement. The aim often shifts from adding properties to reducing debt and making the portfolio sustainable on a lower income.

This is when principal and interest repayments start to matter more. Paying down the loan lowers your debt before your employment income drops. A fixed rate can fit, but check how much extra repayment your lender allows on a fixed portion. Some lenders cap it, and that can slow your debt reduction.

If your fixed term is close to ending, read our guide to fixed rate expiry. Reviewing your options before the term ends gives you time to compare lenders. You can also look at refinancing, though costs such as discharge or valuation fees may apply and vary by lender.

Does a Fixed Rate Change How Negative Gearing Works?

A fixed rate does not change negative gearing rules. Interest on a loan used to buy a rental property is generally deductible whether the rate is fixed or variable, but only the interest part of a repayment is deductible, not the principal.

The bigger change is the new rule. Properties held at 7:30pm AEST on 12 May 2026 keep their current treatment, and so do eligible new builds. From the 2027-28 income year, net rental losses on established residential properties bought after that time can only be deducted against other residential property income. Excess losses can be carried forward.

This changes how you should think about cash flow. If you are buying an established property now, do not plan on a tax refund to cover a fixed repayment. Talk to your accountant about how this applies to your situation, because outcomes depend on your circumstances.

Fixed, Variable or Split: Which Suits Which Stage?

There is no single right answer, but a pattern helps. Fixing more of the loan tends to suit investors with tight cash flow and a growing portfolio, while a bigger variable portion suits those who want to make extra repayments or use an offset account.

Here is how the trade-offs line up:

• Fixed: repayments stay steady, but flexibility may be limited and break costs can apply.
• Variable: more flexibility on extra repayments and features, but repayments can rise.
• Split: a mix of both, but you manage two sets of terms and expiry dates.

Once you have a view, the lender and loan product matter as much as the rate type. A broker can compare loan options from the lenders on their panel. Rate discounts and their availability through brokers vary by lender. If you want a second look at an existing loan, our loan health check is a quick place to start.

Talk to a Broadbeach Mortgage Broker

Whether you are buying your first rental or fine-tuning a portfolio, we will map out which loan structure fits your stage of life and what each choice costs you. Call one of our team or book an appointment at a time that works for you through our Broadbeach mortgage broker page or the book appointment page.

Frequently Asked Questions