Fixed or variable home loan in 2026?
Today's rates compared, and how much rates would need to rise for fixing to pay off.
Key points
- The cash rate is 4.85% after a rise on 3 November 2026.
- 2-year fixed rates average about 0.24 points above the same lenders' variable rates.
- On $600,000, fixing pays off only if variable rates rise about 0.34 points within six months.
- Variable loans keep offsets and unlimited extra repayments.
- A split loan gives part certainty and part flexibility.
With the Reserve Bank lifting the cash rate to 4.85% on 3 November 2026, its fifth rise this year, many borrowers are asking whether to fix. Here's how today's fixed and variable rates compare, and how to decide.
Fixed vs variable rates today
Lowest advertised owner-occupier principal and interest variable rates, including the 0.25% rises lenders announced after the November decision (checked 9 November 2026), against 2-year fixed rates checked on lenders' websites on 23 October 2026:
| Lender | Variable (after Nov rise) | 2-year fixed | Difference (points) |
|---|---|---|---|
| CommBank | 6.59% | 6.82% | +0.23 |
| Westpac | 6.49% | 6.74% | +0.25 |
| NAB | 6.94% | 6.81% | -0.13 |
| Macquarie | 6.54% | 6.59% | +0.05 |
| Great Southern Bank | 6.54% | 6.75% | +0.21 |
| Bank Australia | 6.63% | 6.79% | +0.16 |
| loans.com.au | 6.19% | 7.09% | +0.90 |
Fixed rates can change at any time, and some lenders may have repriced them since. Rates often need a low LVR or a package. See our home loan rates page for conditions and comparison rates.
On average, 2-year fixed rates are about 0.24 percentage points higher than the same lenders' lowest variable rates. When fixed rates sit above variable, lenders are pricing in the chance that rates rise further.
How much would rates need to rise?
Take a $600,000 loan over 30 years. At a variable 6.49%, repayments are $3,788 a month; fixed for 2 years at 6.74%, they're $3,888. If the variable rate never changes, fixing costs about $3,008 more in interest over the 2 years.
For fixing to come out ahead, the variable rate would need to rise by about 0.34 percentage points within the first six months and stay there. That's roughly 1 rate rises of 0.25 points. Later or smaller rises would leave variable cheaper.
Pros and cons
| Fixed | Variable | |
|---|---|---|
| Certainty | Repayments locked in for the term | Repayments change with rates |
| If rates fall | You miss out | You benefit |
| Extra repayments | Often capped (around $10,000 to $30,000 a year) | Usually unlimited |
| Offset account | Rare or partial | Common |
| Breaking early | Break costs can be thousands | Usually just a discharge fee |
| At the end of the term | Rolls to a revert rate, often higher | No change |
Split loans: a middle path
Many lenders let you fix part of your loan and keep the rest variable, for example 50/50. You get some certainty, keep an offset and extra repayments on the variable part, and only part of your loan is exposed to rate changes either way.
How to decide
- Fix if a rise of 0.5 to 1 point would strain your budget, and you value knowing your repayments more than the chance of saving.
- Stay variable if you have savings for an offset, plan big extra repayments, might sell or refinance in the next few years, or can absorb rate rises.
- Lock in the rate. Ask about a rate lock (often a fee of 0.10% to 0.15% of the loan) so the rate can't change before settlement.
- Know your revert rate and diarise the end of the fixed term to shop around.
Nobody knows where rates will go. Fixing is insurance against rises, not a way to beat the bank. Test your budget with the rate rise calculator.
Frequently asked questions
Should I fix my home loan in 2026?
It depends on your budget and plans. Fixed rates are currently about 0.24 points above variable, so fixing costs more unless rates rise further fairly soon. If a rise would put your budget under strain, fixing some or all of your loan buys certainty.
What is a break cost?
A fee to compensate the lender if you pay off or switch a fixed loan early and rates have fallen since you fixed. It can run to thousands of dollars on a large loan.
Can I have an offset account on a fixed loan?
Usually not, or only a partial offset or small amount. Split loans let you keep an offset on the variable part.
What happens when my fixed term ends?
The loan usually rolls onto the lender's standard variable or revert rate, which is often higher than the best rates for new customers. Compare and ask for a better rate before it ends.
Sources
More guides
Last reviewed October 2026. This guide is general information only. It isn't financial, tax, credit or legal advice and doesn't consider your circumstances. Rules change, so check the official sources below or speak to a licensed professional before you make a decision.