Fix, float, or split — the real question is which one suits you.

Rather than print a rate band that ages the moment it's published, here's the shape of the curve as at early 2026 — and it has almost certainly moved since. Across the panel, the gap between owner-occupied variable, two-year fixed and three-year fixed was narrow: two- and three-year fixed sat broadly in line with variable, sometimes a touch under and sometimes a touch over depending on the lender, your LVR, loan size and offset structure. Five-year fixed sat above the variable rate by a meaningful margin and was rarely the right call. We describe the shape rather than quote figures because advertised rates move constantly and only a live, confirmed quote across the 60+ panel for your specific file means anything. The yield curve, in mortgage terms, is the market's live pricing of future rate risk. In early 2026 it was broadly flat at the front end and sloped upward beyond three years, but that pricing can move quickly when inflation, labour-market data or RBA commentary changes. It is not a forecast. It is the consensus of every wholesale market participant trading interest-rate swaps, distilled into a price you can take or leave. What that means for a borrower is that fixing two years can be marginally cheaper than the average variable rate over those same two years if market pricing proves right. If markets are wrong and the cash rate falls faster than expected, variable beats fixed. If they're wrong the other way, fixed wins. The fixed price you see on the lender's website is, fundamentally, the lender's bet on where rates are heading — built off their own cost of money in the wholesale swap market. When fixed sits below variable, the market is pricing cuts; when it sits above, it's pricing the cost of locking in certainty. You're not being offered a forecast; you're being offered the other side of the lender's position.

Rather than print a rate grid that ages the moment it's published, here's the shape of the panel for owner-occupied principal-and-interest at 80% LVR or under. The major banks tend to cluster at the top of the band, with their two- and three-year fixed pricing sitting a touch under their standard variable. The sharpest second-tier banks typically price ten to thirty basis points below the majors on both variable and fixed, and a couple of them lead the panel on a clean, low-LVR file. The specialist non-banks sit across a wider spread depending on the product and your file shape. What the grid never captures is the part that actually decides the cost: the package fee, whether a full offset is included, the size of the rate discount the lender will actually approve for your loan amount and LVR, and the revert rate at the end of any fixed term. Two lenders can advertise the same headline rate and land a meaningfully different all-in cost over five years once those are factored in. We pull live, confirmed pricing across the 60+ panel for your specific file rather than working off an advertised board — comparison rates, fees and offset availability all vary, and only a live quote is reliable.

Fixing is, fundamentally, the purchase of certainty. You pay a small premium (or accept a small discount, depending on the cycle) in exchange for knowing exactly what your repayment will be for the fixed term. The question isn't whether that certainty is worth something; it always is. The question is how much it's worth to you, and whether the price is fair. Three borrower profiles where we recommend a partial or full fix as a matter of course. First — a household running tight cashflow with little buffer. A young family on one and a quarter incomes, with childcare, with a fixed mortgage repayment, can plan. The same family on a fully variable loan, exposed to a 50bp move, can be put under stress quickly. The certainty is worth the marginal premium. Second — a small business owner with lumpy cashflow. Income arrives in chunks, not in fortnightly direct deposits. A predictable repayment removes one variable from a budget that's already volatile on the income side. Third — anyone who will lose sleep watching the rate. Behavioural finance is real. A borrower who'll check their loan balance weekly during a rate cycle is happier with a fixed loan, even if the post-hoc maths shows variable would have won. Where fixing is usually wrong: borrowers with significant offset balances, borrowers who expect to make large lump-sum repayments inside the fix period, and borrowers planning to sell or refinance inside the term. Fixed loans typically cap or prohibit additional repayments above a small annual allowance, and break costs on a fixed exit can be material. One caveat on the offset point: it's a myth that you can never have an offset on a fixed loan. A short list of lenders do offer a full offset account against a fixed rate — it's the exception, not the rule, and the fixed rate on those products is usually a touch higher to pay for the feature. If keeping an offset working matters to you but you also want some fixed certainty, it's worth asking us which lenders currently run a fixed-with-offset product rather than assuming you have to split.

The marginal cost of an extra year of fix is typically 5 to 15 basis points across the panel right now. Indicative. On a $500K loan, fifteen basis points is roughly $750 a year. That's the price of buying an extra year of certainty. Whether that's worth it comes down to your view on rates and your own situation over the third year of the fix. A two-year fix is the default for most borrowers we recommend a fix to. It's long enough to ride out a cycle, short enough that life circumstances are unlikely to change dramatically inside the term. Three-year is the right call if you're confident about the next thirty-six months — same job, no sale, no major life change — and you want the certainty stretched. Five-year fixed rates exist on the panel but the spread above variable is usually meaningful, and the proportion of borrowers whose circumstances stay materially unchanged for five years is small. We rarely recommend a five-year fix. The exception is investors holding for the long term with a clean portfolio and no plans to refinance — in which case the predictability of the fixed cost across the term is genuinely useful for tax and cashflow planning.

Most borrowers ask whether to fix at the wrong time. The right time to look at fixing is when rates are settled or rising — not when they're falling. We've watched borrowers fix at the top of a cycle and then spend two years watching variable rates drift below them, paying $200 a month more than they needed to. We've also watched borrowers refuse to fix at the bottom of a cycle and ride a 200bp rise across an unhedged loan, paying tens of thousands more across the cycle. The answer isn't to time it. The answer is to ask what your cashflow can absorb. If a 1% rise from today's rate would put your household budget under genuine pressure, fix at least part of the loan. If you can comfortably wear 2% of upside and your cashflow is robust, stay variable and keep the offset working. If you don't know which of those two categories you're in, the broker conversation should start with cashflow, not with rates. The Reserve Bank's own commentary on monetary transmission, at rba.gov.au, is worth reading if you want the technical view on how fixed and variable rates respond to cash-rate moves. The MFAA (mfaa.com.au) publishes useful consumer-facing material on broker-channel lending statistics.