Home / Straight Answers / Refinancing

Straight Answers · Refinancing

Should I go fixed or variable?

Bayley Clarke · Mortgage broker on the road · Last checked 18 August 2026 · 4 min read

What fixing actually buys you

One thing: certainty. For the length of the fixed term, your repayment doesn't move. You know exactly what leaves your account every month, which makes budgeting simple and takes the nightly news out of your finances entirely.

What fixing does not buy you is a win on rates. Fixing is not a bet you're supposed to win. The lender sets fixed pricing with a room full of people whose whole job is predicting funding costs, so if you fix and rates fall, you'll pay more than you had to, and if you fix and rates rise, you'll pay less. You can't know which in advance, and neither can anyone selling you a prediction. Fix for the certainty, not for the punt.

What fixing costs you in flexibility

This is the part that catches people, because none of it shows up until your plans change.

• Extra repayments get capped. Most fixed loans cap how much extra you can pay off each year. If a bonus, an inheritance or a property sale lands during the fixed term, you may not be able to put it against the loan.
• Offset and redraw are usually limited. Some lenders offer a partial offset on fixed loans, many offer none. If your savings sitting against the loan is a big part of how you manage money, fixing can switch that off.
• Break costs if you leave early. Sell the house, refinance, or pay the loan out inside the fixed term and the lender charges you their loss on the funding, and it can be substantial. Not a tidy exit fee, an actual calculation of what your exit cost them, and you don't control the size of it.

So the honest test for fixing isn't "do I like certainty". It's "am I confident nothing about this loan needs to change during the fixed window".

What variable buys you, and what it costs

Variable is the flexible option. Unlimited extra repayments, so you can pay the loan down as hard as you like. A full offset account, so your savings work against the interest every day they sit there. Redraw when you need it. And no break costs, so you can sell, refinance or restructure whenever it suits your life rather than the calendar.

The cost is the obvious one: your repayment moves. When rates go down you get the benefit straight away, and when they go up your repayment rises with them, whether or not that month was a good one for it. Variable suits people whose budget can absorb movement. If a rise in your repayment would genuinely break your month, that's not a character flaw, it's information, and it points you back towards fixing at least part of the loan.

The split loan: you don't have to pick one

You can fix part of the loan and leave the rest variable. The fixed portion holds most of your repayment steady, and the variable portion keeps the offset, the unlimited extra repayments and a clean exit on that slice.

How you cut it depends on your situation. Someone with big savings and a tight budget might fix most of it and size the variable slice to their offset balance. Someone expecting a lump sum might do the reverse. It's not flashy, but a lot of my clients land here, because it stops the decision being all or nothing.