Day 22: Should You Fix or Float Your Investment Property Loan?
Published: February 5, 2026
Reading Time: 8 minutes
Location Focus: Perth, WA
Fixing your investment property loan provides certainty about your repayments and protects you against rate increases. This certainty can be valuable if you're relying on rental income to cover repayments and want to ensure your costs don't increase unexpectedly.
However, fixing your loan means you lose flexibility. If rates fall significantly, you'll be locked into a higher rate. If you need to refinance or restructure your loan, you may need to pay break costs.
Floating your investment property loan on a variable rate provides flexibility. You can refinance or restructure your loan without break costs. If rates fall, your repayments decrease automatically. However, you're exposed to the risk that rates will increase, which could impact your cash flow.
For investment properties, the choice between fixing and floating depends on several factors. Your investment strategy matters. If you're planning to hold the property long-term and rely on rental income to cover repayments, fixing your rate might provide valuable certainty. If you're planning to sell the property within a few years, floating your rate might be more appropriate.
Your risk tolerance matters. If you're comfortable with the risk that rates might increase, floating your rate might be suitable. If you prefer certainty about your costs, fixing your rate might be better.
Your cash flow situation matters. If your rental income barely covers your repayments, fixing your rate protects you against cash flow stress if rates increase. If your rental income comfortably covers your repayments, you have more flexibility.
A mortgage broker can help you evaluate these factors and recommend a rate structure that aligns with your investment strategy and risk tolerance.
Call to action: Unsure whether to fix or float your investment property loan? Call Frontier Finance at 0413 798 731. Our brokers will help you evaluate your options and choose the rate structure that works best for your investment strategy.