A lower fixed rate is not the whole deal

Canstar reported that NAB cut selected short-term fixed home-loan rates by up to 0.20 percentage points on 22 July 2026. Its tracking showed 21 lenders had cut at least one fixed rate since 1 June. That competition can create a useful review point, but it does not predict the RBA’s next move or mean fixing the whole loan is automatically better.

The practical decision is whether repayment certainty, flexibility and the likely time you will keep the loan justify the product’s total cost.

Start with the structure, not the forecast

A fixed rate can make repayments easier to budget for during the fixed period. A variable loan may provide more flexibility if you want to make extra repayments or change loans. A split loan combines a fixed portion with a variable portion. Product features and restrictions vary, so the right structure depends on how you expect to use the loan.

Worked repayment and break-even example

Assume a $600,000 balance, 25 years remaining and principal-and-interest repayments. At 6.50%, the monthly repayment is about $4,051. At 6.30%, it is about $3,977—a difference of roughly $75 a month.

If switching costs total $1,800, the simple break-even period is about 24 months.

This mathematical illustration assumes the lower rate remains available and excludes product-specific fees, break costs and feature differences. It is not a lender quote or recommendation.

Compare five parts of the deal

• Fixed term — how long the agreed rate and repayment certainty last.

• Revert rate — the rate that applies when the fixed period ends.

• Break and switching costs — fees that may delay or remove the benefit of a lower rate.

• Loan features — check extra-repayment limits and whether offset or redraw is available.

• Remaining loan term — avoid restarting a longer term that increases total interest.

Fixed, variable or split?

Fixed rate — prioritises repayment certainty for an agreed period.

Variable rate — moves with lender pricing and may offer greater flexibility.

Split loan — uses both fixed and variable portions to balance certainty and flexibility.

Before refinancing

Ask your current lender to review the rate, then compare a like-for-like loan elsewhere. Moneysmart recommends checking whether the benefits outweigh discharge, application, switching and any fixed-rate break fees, and calculating how long it will take to recover those costs.

Bottom line

A lower advertised rate is a starting point. Compare the total cost and choose a structure that fits your cash flow and future plans.

Sources

Canstar — NAB takes the knife to fixed rates ahead of RBA August decision

Moneysmart — Choosing a home loan

Moneysmart — Switching home loans

General information only. This is not financial advice. Loan options and eligibility depend on your personal income, liabilities, assets and lender assessment criteria.