Fixed vs Variable — Timing is Everything

Most people focus on the wrong question when it comes to home loans: “Should I go fixed or variable?”

The real question is: what’s right for your situation, right now?

I recently worked with a client who was feeling the pressure of rising repayments on a variable rate. They wanted certainty. After reviewing options across multiple lenders, we locked in a competitive fixed rate — just before several lenders increased theirs.

They didn’t see it coming. I did — because tracking the market is part of the job.

That moment highlights something important: it’s not just the loan type that matters — it’s the timing of your decision. Further real life context, brokers saw a window in November 2025 when fixed rates were in the high 4s. This window was small and shut very quickly and ever since, we’ve seen banks consistently increase their fixed rates to now all majors being over 6. Timing!!!

So what’s the difference?

Variable rate Your rate moves with the market, influenced by the Reserve Bank of Australia and lender costs. When rates rise, so do your repayments — but you get flexibility. Features like offset accounts, extra repayments, and redraw can help reduce interest if used well.

Fixed rate Your interest rate is locked in for a set period (usually 1–5 years). Repayments stay the same, giving you certainty. The trade-off is less flexibility — limited extra repayments, reduced offset benefits, and potential break costs if you exit early.

Split loan A combination of both. Part of your loan is fixed, part variable — giving you a balance of certainty and flexibility. There’s also times where it could be any combination of variable or fixed - 2 variable splits or 2 fixed or more!

Why timing matters more than most realise

Here’s what many people miss: fixed rates don’t move in line with official rate changes — they move in anticipation of them.

That means there are small windows where fixing makes sense… and other times where it doesn’t.

Right now, rates are still evolving. Some economists expect further increases, and lenders often price these expectations into fixed rates early.

But rising rates don’t automatically mean you should fix. It depends on your loan, your financial position, and your future plans.

When fixing can make sense

• You want certainty and stability in your repayments

• Your budget would be stretched by further rate increases

• You’re not planning to sell or refinance anytime soon

• You believe rates are likely to rise in the short term

When staying variable may be better

• You have strong cash flow and use an offset account effectively

• You want flexibility to refinance, access equity, or sell

• You believe rates may stabilise or fall in the future

• Fixed rates available aren’t offering strong value

The biggest mistake I see

It’s not choosing the “wrong” loan type. It’s making a decision once… and never reviewing it again.

The market moves. Your circumstances change.

A loan that worked perfectly a few years ago could now be costing you more than it should.

The best outcomes don’t come from a perfect decision upfront — they come from regularly reviewing and adjusting over time.

Not sure where you stand?

If you’re on a variable rate and thinking about fixing — or your fixed rate is about to expire — it’s worth reviewing your options.

It’s a quick conversation, but it can make a significant difference.

Sometimes the right move isn’t obvious — until you look at the timing.

Whether you’re just starting your home-buying journey or want a professional to look over your current loan, let's have a conversation that goes deeper than just the numbers.

Andrew Wild

Director & Mortgage Broker, Wild Finance

0432 510 336 | wildfinance.com.au | andrew@wildfinance.com.au