Loan features

Fixed vs variable home loans

Compare repayment certainty, flexibility, offset access, break costs, and rate movement before choosing fixed or variable.

Updated: 15 June 2026
Read time: 7 min read
Reviewed by: emoney broker team

Reviewed for general guidance. Reviewed by emoney broker team. Last updated 15 June 2026. Sources are listed below so borrowers can check the public references behind this general information before speaking with a broker.

Key checks before you decide

Check the fixed period and revert rate.
Ask about extra repayment limits.
Ask whether offset or redraw is available.
Check break cost rules before fixing.
Check how rate changes affect repayment size.
Compare offset, redraw, and extra repayment access.

Full guide

Now read the full guide

Checklist

Fixed can improve certainty

A fixed rate can make repayments more predictable during the fixed period. That can help with budgeting, especially if a borrower wants certainty about the repayment amount for a while.

The trade-off is flexibility. Fixed loans may limit extra repayments, redraw, offset access, switching, and early payout. If the loan is changed before the fixed period ends, break costs may apply depending on the lender and market conditions.

Fixing should be discussed in the context of cash flow, expected property plans, extra repayment goals, and whether the borrower may need to refinance, sell, renovate, or access equity during the fixed period.

Check the fixed period and revert rate.
Ask about extra repayment limits.
Ask whether offset or redraw is available.
Check break cost rules before fixing.

Guide

Variable can improve flexibility

A variable rate can move up or down as lending markets change. Variable loans may also offer more flexible features, depending on the lender and product.

The main risk is repayment movement. If rates rise, repayments can increase and the household budget may need to absorb the change. If rates fall, repayments may reduce or the borrower may choose to keep paying more to reduce the loan faster.

Variable loans are often discussed when borrowers want extra repayment flexibility, offset, redraw, easier switching, or the option to review the loan more regularly.

Check how rate changes affect repayment size.
Compare offset, redraw, and extra repayment access.
Review whether the loan can be repriced or switched.
Keep a buffer for repayment changes where possible.

Example

A split loan may be considered

A split loan can fix part of the loan and leave part variable. This can give some repayment certainty while preserving some flexibility on the variable portion.

The split percentage matters. A 50/50 split behaves differently from fixing a small portion and leaving most of the loan variable. The split also needs to match the borrower's tolerance for repayment movement and need for flexible features.

A split loan is not automatically a middle ground that solves every trade-off. It still needs lender options, fees, feature access, and future plans checked.

Fixing more can increase certainty but reduce flexibility.
Leaving more variable can preserve features but expose more repayment movement.
Offset may only apply to the variable part with some lenders.
The split should be reviewed before the fixed part expires.

Watch out

Check the end of the fixed period early

Fixed-rate expiry is a common review trigger. When the fixed period ends, the loan may roll to a variable revert rate unless another option is agreed.

Waiting until the final week can leave less time to compare refix, variable, split, repricing, or refinance options. It can also make document collection rushed if a refinance needs a closer review.

A useful review checks the expected repayment after expiry, lender alternatives, refinance costs, valuation timing, and whether the current structure still fits the borrower's goals.

Ask for the expected revert rate and repayment.
Check refix and split options with the current lender.
Review whether refinancing costs change the outcome.
Gather documents early if switching may be considered.

Next step

Want a broker to check this against your situation?

Answer a few questions so emoney can route your enquiry to the right broker conversation.Compare rate structures

Example

Model repayment movement before choosing

A repayment calculator can help compare scenarios before making a rate-structure decision. It is especially useful for testing what happens if the rate changes or the loan term changes.

For fixed loans, model the repayment during the fixed period and the possible repayment after expiry. For variable loans, test a few rate levels so the budget conversation is not based on one number.

The calculator does not check lender policy or product restrictions. It simply helps make the repayment trade-off easier to see before a broker reviews actual loan options.

Test the current rate, a higher rate, and a lower rate.
Check monthly and fortnightly repayment views.
Keep the same loan term when comparing rate structures.
Include fees when comparing products.

Broker note

Ask what the rate structure changes

The right conversation is bigger than fixed or variable. Ask what the rate structure changes for repayment certainty, flexibility, fees, features, break costs, and the ability to act if your situation changes.

A broker can help compare the available lender options and explain trade-offs. The site can help you prepare the question, but the loan decision needs borrower details, lender policy, and current product options checked.

If you are reviewing an existing loan, bring the current rate type, repayment amount, fixed expiry date, loan balance, offset balance, and plans for the next year.

What flexibility would be lost by fixing?
What budget risk remains if staying variable?
Would a split structure help or add complexity?
What happens if you sell, refinance, or repay early?

Calculator next step

Home loan repayment calculator

Test whether a loan amount, rate, term, and repayment type feel workable before taking the numbers further.

Best for: Checking repayment comfort across purchase, refinance, or rate-change scenarios.
What it calculates: Weekly, fortnightly, or monthly repayments from loan amount, rate, term, frequency, and repayment type.

A broker still needs to check fees, comparison rates, offset or redraw settings, loan structure, and policy fit.

Open Repayments

Sources used

officialASIC MoneySmart choosing a home loan officialASIC MoneySmart switching home loans officialASIC MoneySmart mortgage calculator officialReserve Bank of Australia cash rate target

General information only

This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.