Change Home Loan – Control Your Rate Now (2026)

As an Australian homeowner, you might be wondering if switching your home loan from a variable rate to a fixed rate is the right move for you. With the fluctuating interest rates and an ever-changing financial landscape, finding stability in your mortgage repayments might be just what you need to manage your finances more effectively. Let's explore how you can make this transition and whether it's the best choice for your situation.

Understanding the Basics of Variable and Fixed Home Loans

Before deciding to switch from a variable to a fixed home loan, it's crucial to understand the fundamental differences between the two. A variable rate home loan fluctuates with the market interest rates. This means your repayments can increase or decrease over time, which can be advantageous if the rates drop but risky if they rise.

On the other hand, a fixed rate home loan locks in your interest rate for a set period, usually between one and five years. This provides certainty and stability in your repayments, allowing you to budget more effectively without the worry of sudden increases in your monthly expenses.

Current Market Rates and Switching Options

As of 2026, the Australian home loan market is experiencing moderate fluctuations in interest rates. Currently, variable rates range from 6.49% to 8.5%, while fixed rates are slightly higher, averaging between 7% and 9% depending on the lender and fixed term length.

Switching from a variable to a fixed rate can be appealing if you're seeking stability in a volatile market. However, it's essential to weigh the potential benefits against the costs and eligibility requirements.

Steps to Change Your Home Loan from Variable to Fixed

Switching your home loan from variable to fixed involves a few key steps:

1. Review Your Current Loan: Begin by reviewing your existing loan terms, including any potential break fees or penalties for switching.
2. Compare Lenders: With access to over 83 lenders, Esteb and Co can assist you in finding the most competitive fixed-rate options. Compare interest rates, fees, and loan features.
3. Check Eligibility: Ensure you meet the eligibility criteria for the fixed rate loan you’re considering. This typically includes a good credit score and stable income.
4. Calculate Costs: Use a mortgage calculator to assess the potential savings or costs associated with switching. Consider break fees and new loan establishment fees.
5. Apply for the Loan: Once you've chosen the right loan, complete the application process with your chosen lender.
6. Finalise the Switch: Once approved, your lender will assist in finalising the switch and managing any remaining details.

Expert Tips and Considerations

Switching from a variable to a fixed rate home loan is a significant decision. Here are some expert tips to consider:

• Assess Your Financial Goals: Consider your long-term financial objectives. If you plan to sell your property soon, a fixed rate may not be the best option due to potential break costs.
• Understand the Terms: Fixed rate loans often come with restrictions on extra repayments and redraw facilities. Ensure you understand these limitations.
• Consider a Split Loan: If you're undecided, a split loan allows you to fix a portion of your loan while keeping the rest variable, offering a balance of stability and flexibility.
• Regularly Review Your Loan: Even after switching, regularly review your mortgage to ensure it remains competitive and aligned with your needs.

Frequently Asked Questions

1. Can I switch back to a variable rate if needed? Yes, but be aware of potential fees and the need to reapply for a new loan product.
2. What are break costs? Break costs are fees charged by lenders if you exit a fixed rate loan before the end of the fixed term.
3. How often can I change my loan type? There's no set limit, but frequent changes can incur costs and affect your credit score.
4. Is a fixed rate always higher than a variable rate? Not necessarily, but fixed rates generally start higher due to the stability they offer.
5. Can I make extra repayments on a fixed rate loan? This depends on your lender's policy, but many fixed loans have limits on extra repayments.
6. What happens after the fixed term ends? Typically, your loan reverts to the lender's standard variable rate unless you negotiate a new fixed term.
7. How do I know if a fixed rate is right for me? Consider your financial stability, risk tolerance, and long-term plans. Consulting with a mortgage expert from Esteb and Co can also provide personalised advice.