There's no universally right answer — but there is a right answer for your situation. Here's how fixed, variable and split loans really compare in 2026.
It’s the question every borrower asks, and the honest answer is: it depends on what you value — certainty or flexibility. The good news is you don’t have to pick just one.
The case for variable
Variable loans move with the market, and they typically come with the features that save real money over time: unlimited extra repayments, offset accounts and redraw. If rates fall, you benefit immediately. If you’re likely to sell, renovate or refinance within a couple of years, variable keeps your options open with no break costs.
The case for fixing
Fixing buys certainty. Your repayment is locked for the term, which makes budgeting easy — valuable for young families across the eastern suburbs juggling childcare and a new mortgage. The trade-offs: extra repayments are usually capped, offset features are limited, and leaving early can trigger significant break costs.
The split loan: the option most people overlook
You can fix a portion and keep the rest variable — say 60/40 — locking in certainty on most of the balance while keeping an offset and unlimited extra repayments on the rest. For many of our clients this is the structure that actually fits how they live.
Timing the market vs structuring for your life
Banks price fixed rates using their own forecasts, so out-guessing them is hard. The better question isn’t where rates are going — it’s how much certainty your household needs to sleep well. That answer, plus a comparison across 25+ lenders, usually makes the decision obvious.
Talk it through with Steve at Tudor Finance — a free, no-obligation chat at our Nunawading office or online. Call (03) 9894 7135.
This article is general information only and doesn’t consider your personal circumstances. Tudor Finance Pty Ltd, Australian Credit Licence 393142.
