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Whether to fix depends on three things: your offset balance, your plans for the next 2–5 years, and your tolerance for payment uncertainty.In March 2026, fixed rates (5.89%–6.40%) are below variable rates (6.22% average). This means fixing currently saves you money on day one — b
Break costs are the fee for exiting a fixed rate early. They're based on the difference between your fixed rate and the current wholesale rate, multiplied by your balance and remaining term. On a $500K loan with 2 years remaining, break costs could be $5,000–$25,000. Always get a quote from your lender before fixing.
Very few lenders offer a full offset account on fixed rate loans. Some offer a partial offset or a redraw facility with limited functionality. This is one of the main drawbacks of fixing — your savings sitting in an offset aren't reducing your interest.
With fixed rates below variable rates, it's a favourable time to fix if you don't rely on an offset account. With the RBA raising rates in 2026 and the outlook uncertain, fixing provides certainty. A 1–2 year term lets you lock in the current discount and reassess as conditions evolve.
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