Fix your mortgage now if certainty matters more to you than the chance of paying less, and the fixed rate on offer is not far above your variable rate. A fix only saves money if the variable rate averages more than the fixed rate over the fixed term, and nobody knows whether that will happen. If you are unsure, fixing part of the loan and leaving the rest variable gives you some of each.

Monthly repayments on $600,000 over 30 years
Rate Monthly repayment Difference from 6%
6.00% (variable example) $3,597
6.25% $3,694 +$97
6.50% $3,792 +$195
6.75% $3,892 +$294
7.00% $3,992 +$395

The break-even test: when does fixing pay off?

Compare the fixed rate with what you expect the variable rate to average over the fixed term, not with today’s variable rate. Take a 2-year fix at 6.50% against a 6% variable rate:

  • If the variable rate rose 0.25% after three months and again after six, it would average about 6.41% over the two years. The fix would cost more.
  • If a third rise came after nine months, the average would be about 6.56%. The fix would come out slightly ahead.

So the fix needs roughly three rises early in the term to win, and if rates fall instead, the variable borrower is ahead from that day. That is the bet you are making, which is why fixing works best as a decision about certainty rather than a forecast.

Where are rates now?

The Reserve Bank raised the cash rate in February, March, May, September and November 2026, to 4.85 per cent on 3 November. Its cash rate table and meeting schedule are the authority and are always current, so we link to them rather than keep a copy here: see the RBA cash rate and your repayments. When most lenders price fixed rates above their variable rates, the market expects rates to keep rising, and that expectation is already in the price you are offered.

What do you give up when you fix?

  • An offset account. Many fixed loans have none, or only a partial offset.
  • Extra repayments. Most fixed loans cap them, commonly at a set amount a year.
  • Flexibility to leave. If rates fall and you refinance or sell, a break cost can apply; see fixed rate break costs, which has a calculator.
  • Today’s rate, unless you lock it. The fixed rate is set at settlement unless you pay a rate lock fee to hold it.

Should you fix for 1, 2, 3 or 5 years?

  • Selling or refinancing within two years: stay variable or keep any fix short, so a break cost does not land on the sale.
  • A tight budget for the next few years, such as parental leave or one income: 2 or 3 years buys certainty for that stretch.
  • Expecting a bonus, an inheritance or a sale: keep that share variable, because fixed loans cap extra repayments.
  • Five years gives the longest certainty but the most exposure to break costs if your plans change.

Split loans: fixing part of your mortgage

A split loan fixes one part and leaves the other variable. On $600,000, fixing $400,000 at 6.50% and keeping $200,000 variable at 6% gives a repayment of about $3,727 a month. The variable part keeps the offset and extra repayments; the fixed part protects most of the loan from rises. A common rule is to keep variable whatever your savings could sit against in an offset. See split home loans.

When is fixing usually a mistake?

When you plan to sell, refinance or pay down a large amount during the term, when your offset balance would save more than the fixed rate protects, or when the fixed rate is well above variable and you could absorb a rise.

Questions people ask

Will interest rates go down?

Nobody can say reliably. Watch the Reserve Bank’s statements and how lenders move their fixed rates, and decide on certainty, not a forecast.

Should I fix for 2 or 5 years?

Two years suits most borrowers who want certainty without a long commitment. Five years suits a stable plan with no sale or large repayment in sight.

Can I fix part of my loan?

Yes. Most lenders allow a split, and you choose the share to fix.

What happens when the fixed rate ends?

The loan rolls onto the lender’s variable rate, often higher than its rate for new customers. Review it before the date; see when your fixed rate ends. A real review started three months before a fixed rate ended.

Charles Touma compares fixed, variable and split options across the lender panel with your own balance and plans, including any break cost on your current loan. A free 30-minute call covers it. General information only, not credit advice; every loan is subject to the lender’s assessment. Example figures use the 6% example rate over 30 years. See also fixed vs variable home loans and the rate rise calculator.

Sources: Reserve Bank of Australia, cash rate target; Moneysmart, fixed vs variable interest rates, checked 21 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.