Choosing a home loan: fixed, floating and the lock-in trap
Financing · 2026-06-30 · 7 min read
A home loan quote is more than the headline rate. The spread over the reference rate, the lock-in period, and the early-repayment penalty all change what you actually pay.
Compare over the full term
Run the total interest over the lock-in period, not the first year. A package that looks 0.05% cheaper can cost more once penalties are included.
Keep a buffer
Rate rises are the main stress test on a mortgage. Make sure you can still afford the repayment if the rate moves up by a full percentage point.
Frequently asked questions
Should I always pick the lowest rate?
Not necessarily — a slightly higher rate with no lock-in can be cheaper overall if you plan to refinance or sell within a few years.