Should You Fix Your Home Loan Rate Right Now?

It's the question on every homeowner's lips this month. And honestly? The answer is more nuanced than a simple yes or no — so let's cut through the noise.

Historically, fixing your rate has rarely paid off. And right now, the situation is even trickier: the banks have already moved. Fixed rates have been quietly lifted in anticipation of where the market is heading, which means the window many borrowers were hoping to jump through may have already closed.

Where rates actually sit today

Here's a snapshot of the current landscape for owner-occupiers:

Variable rate

5.84–6.4%

Depending on lender & your negotiation

5-YEAR FIXED RATE

6.0–6.49%

Often sitting above variable rates

Strong borrowers may nudge below the variable range; others may sit slightly above. The key takeaway: fixed rates are no longer the bargain they once were. Banks are pricing in the expectation that rates stay elevated for the long haul, so locking in for five years typically means paying a premium for certainty — not securing a lower rate.

Fixing today is less about saving money and more about buying peace of mind if rates rise further.

The hidden costs of fixing

Before you make any decision, you need to understand the real cost of going fixed — and it starts before the loan even settles.

Most lenders charge a rate lock fee to guarantee your rate at settlement. Some charge a flat amount, others a percentage of the loan. On a $700,000 loan, for example, a 0.15% fee adds up to $1,050 — before you've made a single repayment.

Watch out for this

Some banks start the rate lock when you apply; others only lock it once you have unconditional approval — which can take weeks, especially if you're self-employed and your accountant needs to be involved. By the time you get to that point, the bank may have already lifted their four- and five-year fixed rates again.

Then there are break costs — the price of exiting a fixed loan early. This is where I see borrowers come seriously unstuck. Break costs can be significant, and they're not always easy to calculate in advance. It's a genuine minefield, and it's exactly why good advice matters.

So, should you fix?

It depends entirely on your situation. Here's how I think about it:

Fixed rate makes sense if you want certainty, you're on a tight budget, and you're confident your circumstances won't change dramatically in the next few years. You're trading flexibility for predictability.

Variable rate suits you if you value flexibility, plan to pay down debt quickly, or think rates might fall further. The ability to make extra repayments or exit without penalty has real financial value.

There's also a middle-ground worth considering: the split loan. Fix part of your mortgage, keep the rest variable. You get a degree of certainty without locking everything away. It's the financial equivalent of not putting all your eggs in one basket.

The honest question to ask yourself is: can you clearly see your life five years from now? Your income, your job, your family situation? If the answer is no — and for most of us, it is — a shorter fixed term, or staying variable, is often the wiser path.

The best strategy isn't about picking the perfect rate. It's about putting yourself in a position where you can sleep at night, whatever happens next.

Questions about your specific situation? Every borrower is different, and a conversation costs nothing. Get in touch and let's work through the numbers together.

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.