Is a variable or fixed rate boat loan the best option?

A variable and a fixed rate boat loan can both be effective with the best option dependent on individual buyer requirements and the outlook for interest rates. The interest rate is a critical issue when taking on marine finance. The size of the rate is a key determinant of the repayments, interest accrued and the overall cost of the loan. But not only do buyers need to find their lowest possible rate, they may also have to decide between variable and fixed rates. Big decisions which can affect their finance and flow through to the overall cost of their vessel.

So which is the best – variable or fixed? That decision may be based on personal preferences and market insights or may depend on the type of rate offered by a lender on the most suitable credit product. There can be benefits of each and buyers can evaluate their options or speak with one of our brokers to source the best finance to suit their specific requirements.

Variable vs Fixed Rate Boat Loan

The key difference between variable and fixed rates is that a variable rate is subject to change and a fixed rate remains unchanged over the term. Changes to variable rates typically occur when the lender reacts to RBA changes to the cash rate. If the cash rate is cut the variable rate may be reduced. If the cash rate is increased and the lender increases rates for their variable rate marine credit products, the rate and the repayments increase. This means more interest accruing.

Fixed rates are not subject to RBA decisions. The rates locked in when the finance is established remain through the term. The monthly repayments also remain unchanged.

Which is the best? Assessing the Interest Rate Market

The Reserve Bank Board kept rates on hold at their December meeting. The first decision for 2026 will be announced on 3 February. The economic conditions through the latter part of 2025 saw an uptick in inflation which was concerning to the RBA Board. The Board was looking to the next set of inflation data to see if this was a trend or a ‘hiccup’. The November Consumer Price Index Data from the ABS due out on 7 January 2026, may provide further insight into inflation.

For those weighing up whether variable or fixed rate marine finance is their best option, may look to what analysts and the markets are predicting for 2026. The general view is for rate rises, not cuts, at some time in 2026. Possibly several. Whether or not this outlook eventuates will depend on how inflation tracks and how the RBA Board assess the overall economy.

For variable loan holders, a rate rise means their rate and their repayments would increase, while fixed rates would not change. For buyers that expect rates to go down over their finance term, a variable rate may be their preference. But with finance terms extending to 4,5 or up to 7 years, that is a considerable timespan over which to make predictions. Through 2026, if rates do go up, variable rate loan holders may see their repayments increase.

For buyers that would prefer certainty, fixed will be their preference. The rate determined when the finance is established remains, unchanged, over the complete term, as do the monthly repayments. This provides buyers with an easier way to manage their money and budget for other expenses and possibly take on other loans.

Variable and Fixed Rate Boat Loan Products

Not all buyers may have a choice of rate type. Lenders may only offer one or the other with their credit products. Our Secured Boat Loan is available with a fixed interest rate and over a fixed term, providing a schedule or fixed monthly repayments. This is the most popular type of credit product for new boat buyers and for buyers of second-hand vessels considered suitable as finance security.

Lenders generally offer variable rates on Unsecured Personal Loans. Some of our lenders do offer fixed so we can offer buyers a choice. This type of credit can suit buyers of vessels not acceptable as finance collateral and for those buying into a share boat arrangement. Your Jade broker will provide you with details on which is the most suitable credit product for your purchase.

How to Get Best Fixed Rate Boat Loan

With our access to a large lender base, we consistently source the most competitive rates in the market. In the current market scenario with expectations of rate rises in 2026, buyers may find the first few months of 2026 offer the best opportunity to secure the lowest rates of the year. Analysts generally consider it is unlikely to see an RBA rate rise in February but this could happen in the months following.

To secure your best variable or fixed rate boat loan, connect with Jade Boat Loans on 1300 000 003.

DISCLAIMER: THE INFORMATION AND SPECIFIC DETAILS CONTAINED IN THE CONTENT OF THIS ARTICLE HAVE BEEN PREPARED AND ARE PRESENTED PURELY AS GENERAL INFORMATION AND NOT INTENDED AS THE ONLY SOURCE OF FINANCIAL ADVICE FOR BOAT BUYERS AND LOAN BORROWERS. FOR THOSE THAT CONSIDER THEY REQUIRE SPECIFIC ADVICE, THEY SHOULD CONSULT WITH A FINANCIAL ADVISOR. LIABILITY IS NOT ACCEPTED IN REGARD TO ERRORS AND MISPRESENTED DATA AND DETAILS HEREIN.