Fixed vs variable home loan rates in 2026

How each one works

Moneysmart describes a fixed rate as one that stays the same for a set period, usually one to five years. Your repayments do not change during that time. When the fixed period ends, the loan usually moves to the lender's variable rate (the revert rate).

A variable rate can go up or down, and the lender decides whether and by how much. Variable loans usually allow extra repayments, and offset accounts and redraw are often available.

A split loan divides the balance into a fixed part and a variable part. Moneysmart notes it can give some certainty plus some flexibility, but it can be more complex because each part can have different rates, fees and conditions.

What lenders advertise right now

These are the lowest advertised standard owner-occupier principal-and-interest rates in RateSonar's data as at 2 Nov 2026, from lenders anyone can join:

For variable, the lowest is 5.69% (Aaa Financial Corporation Portfolio Loan, for borrowers borrowing up to 90% of the property value) and the middle is 6.74%. The cash rate target is 4.60%, in place since 30 Sep 2026. See all home loan rates for your own loan size and deposit.

One caution: the lowest rate in a table is not the rate most borrowers can get. Check each lender's conditions, and compare comparison rates (how they work).

What the RBA's data shows

The RBA's table F6 (data to August 2026, published 8 October 2026, checked 2 November 2026) gives average rates on owner-occupier loans funded in the month at all institutions:

These are averages across the market, rounded to one decimal place, and describe loans already funded. They are not a forecast and not a quote.

The trade-offs

The Moneysmart points are that fixed loans may charge a break fee if you switch loans, sell or repay early, and that some fixed loans have fewer features, such as offset accounts or the ability to make extra repayments.

Which suits which borrower

This is general information, not a recommendation.

• Fixed may suit someone who needs certain repayments for a period, for example a tight budget or a planned change in income.
• Variable may suit someone who wants to make large extra repayments, use an offset account, or may sell or refinance soon.
• A split may suit someone who wants a bit of both.

Neither is cheaper in every case. Fixed rates reflect what the market expects, so a fixed rate that is lower than variable today does not mean you will be better off.

Test your repayments

Moneysmart suggests checking whether you could afford repayments if rates rise by 3%. On a $600,000, 30-year loan at the middle variable rate of 6.74%, the repayment is about $3,888 a month. At 3 percentage points higher it would be about $5,151, which is $1,263 more a month (RateSonar's arithmetic, principal and interest). If that figure would hurt, consider fixing part of the loan or building a buffer in an offset.

What markets are pricing

The rate outlook page shows what bond and futures prices imply for the RBA cash rate. It is the market's reading, not a RateSonar forecast, and it is no guarantee. Fixed rates are priced off those expectations, so fixing is not a way to beat the market. Read it as context, not as advice.