Fixed vs Variable in 2026: Which Strategy Wins Right Now?

The fixed-versus-variable debate is one of the most common questions we hear from clients. In 2026, the answer depends on your risk tolerance, cash flow, and view of where rates are heading.

Current Market Conditions

The RBA has held the cash rate steady since mid-2025, and market consensus points toward modest rate reductions in late 2026. Fixed rates from major lenders currently range from 5.69% to 6.29% for 2-year terms, while competitive variable rates sit between 5.89% and 6.39%.

The Case for Variable

Variable loans offer flexibility: unlimited extra repayments, redraw facilities, offset accounts, and the ability to refinance without break costs. If rates do fall as expected, you'll benefit immediately without needing to act.

The Case for Fixed

Fixed loans provide certainty. If you're budgeting tightly or want to lock in your repayment amount, a 2-3 year fixed term removes the anxiety of rate movements. However, you'll face break costs if you need to refinance before the fixed term expires.

The Split Strategy

Many of our clients opt for a split loan — fixing a portion (typically 50-70%) for stability while keeping the remainder variable for flexibility and offset access. This balanced approach hedges against both scenarios.

Our Recommendation

There's no universal "right" answer. The best strategy depends entirely on your personal financial position, risk tolerance, and property goals. We model multiple scenarios for every client to show the dollar impact of each approach over your intended holding period.

Speak with us for a personalised rate strategy session — we'll show you exactly what each option means for your specific loan.