With interest rates shifting and economic uncertainty continuing, many borrowers are asking the same question: should I fix my rate or stay variable?

The case for variable

Variable loans offer flexibility, including:

  • Extra repayments
  • Access to offset accounts
  • Easier refinancing

However, they’re also exposed to further rate increases, which can make budgeting less predictable.

The case for fixed

Fixed-rate loans provide certainty. You’ll know exactly what your repayments will be for a set period, which can be helpful in a rising-rate environment.

But fixed loans typically come with:

  • Less flexibility
  • Break costs if you exit early
  • Limited additional repayment options

What are borrowers doing?

Many borrowers are choosing a split loan strategy, fixing a portion of their loan while keeping the rest variable. This balances stability with flexibility.

So, what’s right for you?

It depends on:

  • Your financial stability
  • Risk tolerance
  • Future plans (e.g. selling, upgrading, investing)
  • How long you plan to keep your loan

The bottom line

There’s no one-size-fits-all answer. The right strategy is the one that aligns with your financial goals and risk comfort. A broker can help you model different scenarios and choose the best option.