With the RBA hiking rates again, the fixed-or-variable question is back. The answer depends on your risk tolerance, how long you plan to hold the loan, and what you think rates will do next. Here's the honest breakdown.
As of April 2026, typical rates for owner-occupier, principal and interest loans:
| Product | Typical Range | Best Available |
|---|---|---|
| Variable rate | 6.0% – 7.0% | ~5.80% |
| 1-year fixed | 5.8% – 6.8% | ~5.60% |
| 2-year fixed | 5.5% – 6.5% | ~5.40% |
| 3-year fixed | 5.5% – 6.5% | ~5.30% |
| 5-year fixed | 5.5% – 6.5% | ~5.40% |
Rates are indicative and change frequently. Check with a broker or comparison site for current offers.
Many borrowers split their loan — fixing a portion (often 50-70%) for certainty while keeping the rest variable for flexibility and offset access. This is a reasonable middle ground in uncertain rate environments. Ask your lender or broker about split loan options.
The RBA delivered a third consecutive +25bp hike on 6 May 2026, taking the cash rate from 4.10% to 4.35% — back to the 2023 cycle peak. The vote was 8-1, firmer than the 5-4 split on the March 2026 hike. Westpac is now the only major bank explicitly forecasting two further +25bp hikes in 2026, which would take the cash rate to 4.85%; the other majors expect a hold from here unless inflation surprises further to the upside.
The key variable remains inflation. Headline CPI ran at 4.6% in the March 2026 quarter, well above the 2-3% target band, with the Board signalling inflation is likely to remain above target for some time. The next decision is on 16 June 2026.
Hundreds of thousands of Australians locked in fixed rates at 2-3% during 2020-2022. As those terms expire and borrowers roll onto variable rates above 6%, the repayment shock has been significant — often $500-900+ per month. If you're currently on a low fixed rate approaching expiry, start planning now: model the new repayment using our Repayment Calculator, and use the Refinancing Calculator to check if better rates are available elsewhere.
Bottom line: There's no universally right answer. If you're at or near mortgage stress and can't afford further rate increases, fixing some or all of your loan provides certainty. If you have buffer and want flexibility, staying variable makes sense. A mortgage broker can model scenarios specific to your situation — their service is free (brokers are paid by lenders).
Unsure what's right for your situation?
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