As the outlook for interest rate expectations changes in response to higher global oil prices, many Australians appear to be reviewing what’s usually their biggest financial commitment – their mortgage – and examining whether a fixed interest rate would suit their needs.
Commonwealth Bank analysis shows Google searches for terms like “fixed rate” and “fixed rate loan” were up more than 250 per cent in March compared to a year earlier.
Such searches tend to spike around Reserve Bank interest rate announcements, the analysis showed.
The RBA has already increased the official cash rate twice in 2026, lifting it by a quarter of a percentage point in both February and March. Commonwealth Bank economists predict there is a strong likelihood of another increase in May.
What’s the difference between fixed and variable rate mortgages?
A fixed rate home loan allows borrowers to lock in their interest rate for a set period, typically between one and five years, meaning repayments remain unchanged during that time. That consistency can be appealing when household budgets are under pressure.
“Knowing what your repayments will be over a period of time can make it easier to plan and manage expenses,” CommBank’s Executive General Manager Home Buying Marcos Meneguzzi says.
But that certainty comes with trade-offs. Fixed loans often have less flexibility, including limits on additional repayments, and borrowers won’t benefit if interest rates fall during the fixed term.
It’s also worth noting that fixed rates can change between application and funding. Some lenders, including CommBank, offer options to help manage this, such as the ability to lock in an interest rate on eligible fixed rate applications for a limited period, typically for a fee.
Variable rate home loans, by contrast, can move over time – rising or falling as interest rates change. While they are influenced by changes in the Reserve Bank cash rate, other factors such as funding costs and market competition can also play a role in the rates that borrowers offer.
That variability can suit those who value flexibility, particularly features like making extra repayments or accessing redraw, but it also requires a level of comfort with changing repayment amounts.
Can you mix and match fixed and variable mortgages?
Some lenders combine elements of fixed and variable mortgages. Splitting a loan, so that, for example, one portion of the loan is on a fixed rate and the rest is on a variable rate, is one way to balance competing priorities and combine the certainty of fixed repayments with the flexibility of a variable component.
Ultimately, the decision comes down to how individual borrowers want to weigh certainty, flexibility and their expectations for the future and how all that relates to their own circumstances.
What kind of mortgage do most Australians have?
At present, the great majority of Australians’ mortgages are variable rate, with less than 5 per cent of new and outstanding mortgages on fixed-rate terms, according to the RBA’s statement on monetary policy issued alongside its February 2026 interest rates decision.
That hasn’t always been the case, however. During the COVID pandemic, fixed-rate mortgages rapidly increased in popularity, as people looked to lock in the very low interest rates that were offered at the time to help support economies.
In a 2024 bulletin, the RBA said: “As a result, the share of fixed-rate housing loans increased substantially, from around 20 per cent of outstanding housing credit in early 2020 to a peak of almost 40 per cent in early 2022.”
Why are people looking at fixed mortgages again?
Times of economic uncertainty can be a trigger for people to reassess how their loans are structured and what their options are.
“Often it’s not just about where rates are today, but how comfortable borrowers feel navigating what comes next”, Meneguzzi says.
“When there’s uncertainty around interest rates, people often take a step back and look at the structure of their home loan – not just the rate itself, but how it works for them day to day.”
“In a higher cost-of-living environment, predictability and flexibility can become just as important as the headline number.”
Understanding your options
Understanding the differences between fixed and variable rates and how they may respond to changing conditions is an important part of the home buying journey.
“Every customer’s situation is different, so taking the time to understand how different loan structures may work for you is really important,” Meneguzzi says.
“Speaking with a home lending specialist can help customers explore the options available and how they might align to their individual needs and goals.”
Digital tools can also help borrowers model how repayments could change over time under different rate scenarios, giving them a clearer picture of what to expect.
CommBank offers a range of tools and support to help customers explore their options, including repayment calculators and access to home lending specialists who can walk through different scenarios.
