Fixed or variable home loan?
Fixed buys certainty. Variable buys flexibility. Most borrowers can have some of each.
Fixed rate
Your rate and repayment are locked for a set term, commonly one to five years. You know what you will pay. In exchange, extra repayments are usually capped, offset accounts are limited, and leaving early can trigger break costs.
Variable rate
Your rate moves when the lender changes it, usually after Reserve Bank decisions. You can make unlimited extra repayments, use an offset and refinance without break costs. Your repayment can also rise with little notice.
Break costs
If rates have fallen since you fixed and you repay or refinance early, the lender charges you for its loss. On a large loan with years left to run, that can be thousands. Tell us if you might sell, renovate or receive a lump sum during the fixed term.
Splitting the loan
A split puts part of the loan on fixed and part on variable. You get certainty on one portion and keep an offset and extra repayments on the other. The right proportion depends on how much you expect to pay off early.
Nobody picks the bottom
Fixed rates already include the market’s view of where rates are heading, so fixing is not a way to outsmart it. Choose fixed if a rise would hurt your budget, and variable if flexibility matters more.
Questions people ask
What happens when my fixed term ends?
The loan rolls to the lender’s variable rate, which is often not its best one. We contact clients before the term ends to reprice or compare.
Can I lock a fixed rate before settlement?
Most lenders offer a rate lock for a fee, holding the rate for a set period.
General information, last updated November 2026. Scheme figures, lender policies and duty rates change, so confirm them before you rely on them.
Keep reading
Let’s talk about your next move
Twenty minutes on the phone. No documents and no sales pitch.