Fixed vs variable in 2026: the strategy guide

Fixed rates are sitting at a 25bp premium to variable. The honest broker view on whether locking in makes sense for refinancers, FHBs, and investors right now.

For most of the last decade, fixed rates have been a binary call — clearly cheaper or clearly more expensive than variable. In 2026 they're sitting at a small premium to variable: today's lowest 3-year fixed is around 5.84% vs the lowest variable around 5.24%. That's a 60bp gap, which is small enough to matter and big enough to make the choice non-obvious.

What fixing actually buys you

The pure financial case for fixing in 2026 is weak — you're paying a premium for certainty. But "certainty" matters more for some borrowers than others.

If you've recently refinanced and stretched your serviceability to the limit, fixing locks in what you've committed to. If the RBA cuts twice in the next 18 months (the current bond market implied path), you'd save more on variable. If they hold or hike, you'd save more on fixed.

For someone with comfortable serviceability buffer, the variable rate is currently cheaper and gives you more flexibility — most variable products have full offset accounts, unlimited extra repayments, and easier discharge if you decide to refinance again.

How big a deal is it?

On a $650k loan over 25 years remaining: - 5.24% variable: monthly repayment ~$3,895 - 5.84% 3-year fixed: monthly repayment ~$4,135 - Monthly difference: ~$240 - Over 3 years: ~$8,640 more on fixed

That $8,640 is your insurance premium against rate volatility. Whether it's worth it depends on (a) your read of where the cycle's going and (b) how much sleep you'd lose if the variable rate moved against you.

The split loan structure

The compromise most brokers recommend in this scenario is a split: typically 60% variable / 40% fixed, or 50/50. The variable portion gives you offset benefits and flexibility for extra repayments; the fixed portion gives you partial certainty if rates move up.

The structure isn't free — most lenders will charge a one-off split fee of $300-500 — but for a 30-year mortgage, the optionality is usually worth it. Our [repayment calculator](/calculators/repayment) lets you model what a split would look like for your loan.

What you should do now

If you're refinancing or buying right now, talk through the structure with a broker rather than just defaulting to whatever your lender suggests. The "default" for most lenders is variable + standard variable, which is rarely the best structure for a borrower's situation.

A broker consultation is free and we can model 4-5 different structures (full variable, full fixed, 60/40 split, etc.) on your specific loan amount in about 10 minutes.