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Neither is better for everyone. A fixed rate gives you certain repayments for one to five years but usually limits extra repayments, rarely comes with an offset and can cost you break fees if you leave early. A variable rate moves with the market but keeps your flexibility. Right now, the RBA's July 2026 data show short fixed terms priced about the same as variable, and fixed terms over three years priced higher.
This page sets out the current averages, what each lender allows while you're fixed, how break costs and rate locks work, and how a split loan lets you hedge.
By Better Rate Mate Editorial Team · Last reviewed
The cash rate is 4.35% as at 28 September 2026. The RBA raised it three times in 2026 (on 4 February, 18 March and 6 May) and held it on 12 August; its next decision is due on 29 September 2026. Lenders price fixed rates off where they expect rates and their funding costs to go, so the spread between fixed and variable changes as expectations shift.
| Rate type | Average rate |
|---|---|
| Variable | 6.24% |
| Fixed for 3 years or less | 6.25% |
| Fixed for more than 3 years | 6.86% |
Fixed: you know exactly what your repayments will be, which helps budgeting, and you're protected if rates rise. You won't benefit if rates fall, you may pay a break fee if you refinance, sell or pay the loan off early, and fixed loans often have fewer features.
Variable: you can usually make unlimited extra repayments, redraw and use an offset, and you benefit from rate cuts. Your repayments rise if rates rise, and your lender decides whether and by how much to pass on changes.
Lenders cap extra repayments on fixed loans, and exceeding the cap can trigger break costs or an adjustment. The limits differ a lot.
| Lender | Extra repayments while fixed | Fixed terms | Rate lock |
|---|---|---|---|
| Westpac | $30,000 in total over the fixed term | 1 to 5 years | Available, fee applies |
| NAB | Pay ahead up to $20,000 during the term | 1 to 5 years | Check with NAB |
| CommBank | Up to $10,000 per fixed year | 1 to 5 years | $750 |
| ING | Under $10,000 in any one-year period | 1 to 5 years | Check with ING |
| ME Bank | Up to $10,000 a year | 1 to 5 years | Check with ME |
| Bankwest | Up to $10,000 a year | Fixed terms available | Check with Bankwest |
| Suncorp Bank | Up to $500 a month | 1, 2, 3 or 5 years | Check with Suncorp |
| St.George | Check with St.George | Fix all or part | Capped at $1,000 (loans up to $2m) |
| ubank | Check with ubank | Flex Fixed | $500 |
| Athena | Check with Athena | 1 to 3 years | Check with Athena |
If you pay off, refinance or change a fixed loan before the term ends, the lender can charge a break cost to cover its own loss on the fixed funding. The amount depends on how much rates have moved since you fixed, the balance and the time left. When rates have fallen since you fixed, break costs tend to be larger.
At the end of the term the loan usually rolls to the lender's variable 'revert' rate, which can be well above its advertised variable rates. Comparison rates on fixed loans are calculated on the assumption that the loan reverts, which is why they're often much higher than the fixed rate itself. Plan what you'll do before the fixed term ends.
A split loan fixes part of your balance and leaves the rest variable, for example 50/50 or 20/80. You get some repayment certainty while keeping extra repayments and an offset on the variable part. Most major banks allow splits; Macquarie charges no fee to split; Suncorp requires at least $10,000 per split.
That depends on how long you need certainty and what the extra cost is. On the RBA's July 2026 averages, fixing for longer than three years cost about 0.6 percentage points more than a shorter fix. A longer fix also means longer exposure to break costs if you sell or refinance. If you might move, renovate or restructure within five years, a shorter fix or a split usually carries less risk. This is general information, not advice.
Neither is better for everyone. Fix for repayment certainty if a rate rise would stretch your budget; stay variable for extra repayments, offset and the benefit of any rate cuts. A split loan gives you some of each.
On the RBA's July 2026 averages, new variable loans averaged 6.24%, fixed terms of up to three years 6.25% and longer fixed terms 6.86%. The cash rate was 4.35% as at 28 September 2026 after three rises this year. What suits you depends on your budget and plans; this is general information, not advice.
Longer fixes currently cost more on average and carry break-cost risk for longer. Fix for five years only if you are confident you won't sell, refinance or need to repay large sums in that time.
The loan usually moves to the lender's variable revert rate unless you choose a new fixed term or switch loans. Ask your lender for its revert rate in advance and compare it with the market.
Usually up to a cap. Westpac allows $30,000 over the fixed term, NAB $20,000 over the term, CommBank $10,000 per fixed year, ING and ME up to $10,000 a year, and Suncorp $500 a month.
We don't quote lenders' interest rates: they change daily and with every RBA decision, and we don't have a live rate feed. The averages we quote are the RBA's published figures for the month shown. Always get the lender's key facts sheet, which shows the rate and comparison rate for your loan amount.
