Three RBA cuts. Falling variable rates. Stubborn fixed rates. Here’s the honest case for each — and when each actually wins.
With the RBA cutting 3 times in 2026, variable rates have adjusted down. Fixed rates move on different drivers (swap rates, lender appetite) and don’t always follow. Here’s the case for each.
With the RBA cutting 3 times in 2026, variable rates have adjusted down. Fixed rates move on different drivers (swap rates, lender appetite) and don’t always follow. Here’s the case for each.
Fixed works in three specific scenarios:
1. You need certainty — childcare fees, school fees, single-income household, tight budget. Knowing the repayment for 2 years is worth a small premium.
2. You believe rates will rise again — if RBA pivots back to hiking in 2027, today’s fixed rates could look cheap.
3. Break costs on your current fixed loan are low — if you’re already fixed and your break cost is small, refixing at a lower rate can make sense.
1. You think rates will keep falling — more RBA cuts in 2026-27 would benefit variable borrowers automatically.
2. You want offset / redraw flexibility — variable loans typically come with full offset accounts and unlimited extra repayments. Fixed loans often restrict both.
3. You might refinance, sell, or pay a lump sum — variable has no break costs if you pay down the loan early, refinance, or exit.
A split loan divides your loan into two portions: one fixed, one variable. Common splits are 50/50, 60/40, or 70/30.
Benefit: certainty on the fixed portion PLUS flexibility on the variable portion (offset, extra repayments).
Catch: you need enough variable runway so the offset account is worth having. A 90/10 fixed/variable split isn’t much use because the offset barely offsets anything.
If you’re already on a fixed rate and want to exit early (refinance, sell, pay a lump sum), you may owe break costs.
Break costs are calculated from the difference between your fixed rate and current swap rates multiplied by your remaining fixed period. In a falling-rate environment (like 2026), break costs can be significant — often $5,000 to $20,000+.
If you’re considering breaking a fixed loan, ask your lender (or a specialist) for a written break-cost quote first.
We match you with a vetted home loan specialist who’ll model your exact scenario. Free to you, no obligation, no lock-in.
Get Matched With A Specialist →It depends on your cashflow need for certainty and your view on rates. Three RBA cuts have already favoured variable borrowers; if you expect more cuts, stay variable. If you need budget certainty or expect rates to rise again, fix. A split is often the ‘have both’ compromise.
Fixed rates are driven by wholesale swap rates and lender appetite, not the RBA cash rate directly. When markets expect the cutting cycle to end, fixed rates flatten out even as the RBA keeps cutting. That’s why in April 2026 with variable around 5.75% and best fixed 2yr around 5.24%, the gap is small.
Usually yes — if your split has enough variable for a meaningful offset balance (generally $30K+). A 70/30 variable/fixed split gives strong offset savings plus partial rate certainty. It’s the most common structure specialists recommend for borrowers who can’t decide.