Fixed, Variable or Split? How Healthcare Workers Can Choose a Rate That Works For Them

Let’s make rate types less confusing and more aligned with your lifestyle, income, and financial goals.

Choosing between fixed, variable or split rate loans can feel like trying to predict the future. But it doesn’t have to be daunting. When you understand how each option works, especially through the lens of healthcare work, the choice becomes much clearer.

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Fixed Rate Loan

This locks in your interest rate for a set period (usually 1-5 years). Your repayments stay exactly the same, no matter what the market does.

Pros:

• Certainty in your repayments (great for budgeting)

• Protection from rate rises (especially important when you’re planning for maternity leave, shift changes, or starting a new role)

• Peace of mind during uncertain economic periods

Cons:

• Limited flexibility (you might not get redraw or offset)

• Break fees if you end the fixed term early

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Variable Rate Loan

Your interest rate can change based on market conditions, which means your repayments may go up or down.

Pros:

• Access to features like offset accounts, extra repayments, and redraw

• Easier to pay off your loan faster if your cash flow allows

• More flexibility if you want to refinance or restructure

Cons:

• Less predictability in repayments

• Exposure to rate increases

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Split Loan

This gives you the best of both worlds. You split your loan,  part fixed, part variable,  so you benefit from both predictability and flexibility.

Pros:

• Balance of stability and adaptability

• Ideal if you’re a dual-income household or navigating changing rosters

• Can suit healthcare couples managing both cash flow and long-term planning

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Healthcare Insight: Healthcare workers often manage variable income, multiple job roles, and unique tax conditions. A fixed rate might offer peace of mind during parental leave or hospital placement periods, while a variable portion keeps flexibility if your income grows or shifts.

You also might want offset access to park your salary packaging benefits, savings, or bonus pay - a variable or split loan can help here.

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Real-Life Example:

Monique, a junior doctor, fixed her loan rate for two years right before the RBA began raising interest rates. Her partner Leo, a physiotherapist, chose a variable rate. Monique avoided repayment shocks, while Leo benefited from offset features and made extra repayments. Their split strategy helped them navigate their different financial priorities together.

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What to Ask Your Broker:

• Can I make extra repayments if I fix my loan?

• Are there break costs if I end my fixed rate early?

• Can I offset against my variable portion?

• Should I split my loan to match my work schedule and income type?

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Bottom Line: You don’t need a crystal ball to choose your interest rate structure. What you do need is a clear understanding of your current financial situation, income flow, and future plans. For healthcare workers especially, choosing the right loan structure can make all the difference in managing risk and building wealth confidently.