“It is never too late to fix, but the strategy and the rates you lock in are fundamentally different in a rising rate environment.”
Three RBA rate rises in 2026 have materially shifted fixed rate pricing. Current fixed rates already bake in the market’s expectation of further increases. Switching now is a way to manage exposure to future rises rather than avoiding past ones.
What fixed rates look like right now
One and two-year fixed rates from major lenders are currently running between 0.2% and 0.6% above standard variable rates. Since lenders have already priced in expected RBA decisions, you are capping your exposure rather than fixing below the expected rate.
When fixing still makes sense
Fixing remains useful if budget certainty matters more to you than rate optimization. Households with tight margins often find certainty more valuable than the possibility of a lower rate later. The core question is whether your cashflow can absorb the uncertainty of further rises.
What to watch before deciding
Check the comparison rate and break cost conditions before deciding. Some fixed products allow for a penalty-free exit if you sell the property. Also, understand the revert rate to ensure the loan remains affordable after the fixed term ends.
The split loan option
Fixing part of your loan and leaving part variable is a common structure in uncertain rate environments. You get partial certainty on a portion of repayments while retaining the ability to make extra repayments and use an offset on the variable portion.
→ You may wish to speak with a licensed mortgage broker to assess your personal circumstances. This is general information only. Individual circumstances vary and scheme details change regularly. Verify current eligibility, caps, and terms with official sources before making decisions. Speak with a licensed mortgage broker for advice tailored to your situation. All loans are subject to lender approval.
Sources: RBA Cash Rate Target, May 2026; ASIC MoneySmart, Fixed Rate Home Loans 2025; Canstar, Interest Rate Forecast Australia, May 2026.
