"Should I fix?" is one of the most common questions we get from clients, and one of the most genuinely difficult to answer well. The honest answer almost always starts with "it depends" — but late 2026 has some specific dynamics worth understanding.
Where rates sit right now
As of mid-2026, the best owner-occupied variable rates are sitting in the high 5% range. Three-year fixed rates have come down meaningfully from their 2024-2025 peaks and are now competitive with — sometimes below — variable. Five-year fixed rates are still pricing in some inflation premium and sit slightly above three-year fixed for most lenders.
This is a different environment from 12-18 months ago, when fixed rates were significantly higher than variable, making the fixed decision easy: variable was the default unless you had a specific cash-flow reason to fix.
The traditional fix vs variable trade-off
Fixing your rate gives certainty. You know exactly what your repayment is for the term. If rates rise, you're protected. If rates fall, you don't benefit — and breaking out of a fixed rate to refinance can come with break costs that wipe out any gains.
Variable rates flex with the market. If the RBA cuts, your repayments typically drop within a couple of months. If they raise, your repayments rise. Variable loans typically come with more features (offset, redraw, additional repayments without penalty) that fixed loans often restrict.
How we're thinking about it for late 2026
For most owner-occupier clients with stable income and no specific cash-flow pressure, we're leaning towards variable or a partial fix (fixing 40-60% of the loan, leaving the rest variable). This gives some certainty without locking the whole position.
The case for going fully fixed in late 2026:
- You're on tight cash flow and need predictability over the next 2-3 years
- You believe rates will rise meaningfully from here (and you're willing to take that bet)
- You're on a fixed term and don't plan to refinance, sell, or make large extra repayments
- You're risk-averse and the peace of mind is worth giving up potential variable upside
The case for going fully variable:
- You want maximum flexibility — offset, extra repayments, refinance options
- You believe rates have peaked and will trend lower over the next 12-24 months
- You have stable income and tolerance for repayment variation
- You're planning property purchases, refinances, or significant changes in the next 1-3 years
Why "split" is often the best answer
For many of our clients, the right answer in late 2026 is to split the loan — fix a portion, leave the rest variable. Common splits are 50/50, 60/40 (favouring variable), or 40/60 (favouring fixed). This gives you:
- Some certainty over the fixed portion
- Flexibility (offset, extras, refinance) on the variable portion
- Protection if rates rise (the fixed portion is locked)
- Upside if rates fall (the variable portion will drop)
Splits avoid the worst-case scenario where you fix the whole loan just before rates drop, or stay fully variable just before rates rise. They cost very slightly more than going fully one direction, but the optionality is worth it for most clients.
What matters more than the fix decision
Here's the deeper observation: for most clients, the rate decision (fixed vs variable) matters less than the structural decisions:
- Is the loan structured to support your tax position (separated splits for investment vs personal)?
- Do you have an offset account active and being used?
- Is the loan term realistic, or are you on a 30-year mortgage when you could comfortably be on 25?
- Are your repayments aligned to your cash flow timing?
- Is the lender's product right for your circumstances, not just their rate?
A well-structured loan at a slightly higher rate often beats a poorly-structured loan at the lowest rate.
Our practical advice
If your fixed rate is expiring in the next 6-12 months, this is the highest-leverage moment to review everything — not just the rate. We see many clients default to their current lender's standard variable rate at roll-off, missing potential savings of $5,000-$15,000 per year.
If you're considering fixing now and your variable rate is significantly above the best available, refinance first to get the rate down, then think about fixing some or all of the new loan. Don't fix at an uncompetitive rate just because your current lender is offering a "discount."
Book a strategy call and we'll review your situation — current rate, structure, position, and goals — and give you a clear recommendation rather than a generic answer.
