No more rate cuts in the race this year: is now the time to fix?
04 Nov 2025
The RBA kept the cash rate on hold on Tuesday, and with mounting speculation the cutting cycle is at or near the end, the question for many borrowers is, is now the time to fix?
The RBA in its statement today said it will do what it takes to achieve its priorities of price stability and full employment, using incoming global and domestic data to help guide its decision-making process.
What does a good rate look like?
Market competition is still driving variable rates down. Our rate tracking shows since 1 October, 15 lenders have cut at least one variable rate for new customers. This includes cuts from Westpac, CBA’s offshoot Unloan, Bank of Queensland, Heritage Bank and Bankwest.
Canstar estimates of RBA data shows the average owner-occupier is on a variable rate of 5.53%, however, there are 42 lenders offering at least one variable rate under 5.25%.
First home buyers continue to be the flavour of the month, with four of the lowest six rates reserved exclusively for these buyers (excluding introductory rate loans).
Variable rates: key stats
- 5.53% is the average owner-occupier variable rate
- 4.99% is the lowest variable rate (first home buyers only)
- 5.08% is the lowest variable for refinancers
- 42 lenders currently offer at least one variable rate under 5.25%
Fixed rates: key stats
- 5.18% is the average short-term fixed rate for owner-occupiers (3 years or less)
- 4.69% is the lowest fixed rate, available on a 1-year term
- 46 lenders offer at least one fixed rate under 5%, including big four banks CBA and Westpac.
- Approx. 80% of lenders’ lowest rate loans are fixed, not variable.
Is now the time to fix?
We compared a series of scenarios to see which option would come out ahead over the next two years – the lowest two-year fixed rate at 4.74% or the lowest variable rate for refinancers at 5.08%.
For an average owner-occupier with a $600,000 loan and 25 years remaining, switching to the lowest 2-year fixed rate instead of the lowest variable would potentially deliver a saving, if rates stay on hold, of around $4,055 in interest over two years.
If there was one standard 0.25 percentage point cut in February 2026 in the next two years, fixing would still come out ahead, saving about $1,585 in interest.
However, if there are two cuts – one in February and another in May – the tables would turn, with fixing costing about $504 more in interest charges than staying variable.
← Mobile/tablet users, scroll sideways to view full table →
| Lowest 2-year fixed rate vs the lowest variable on a $600,000 loan | |
|---|---|
| No. of 0.25% pt cuts | Which comes out on top after 2 yrs? |
| 0 cuts | Fixed by $4,055 |
| 1 more cut | Fixed by $1,585 |
| 2 more cuts | Variable by $504 |
Source: Canstar. Notes: based on an owner-occupier paying principal and interest with a $600k loan in November 2025 and 25 years remaining. Assumes cuts are in February and May 2026. Calculations are for illustrative purposes only. They only reflect the interest charges and do not include fees or any extra repayments. Lowest rates exclude first home buyer only, eco and introductory rate loans.
Borrowers buckling down for cash rate pause
Canstar’s data insights director, Sally Tindall says, “Today’s statement reflects the challenge now facing our central bank. Its dual mandate to keep prices in check and Australians in jobs is becoming increasingly difficult to achieve.”
“Borrowers need to buckle down for what could well be an extended pause to the cash rate. This means you can either keep doing the heavy-lifting on your home loan by yourself, or move to a lender that provides you with further rate relief.
“In the last five weeks, 15 lenders have cut at least one variable rate, but only for new business, which proves, once again, that shiny new customers get the sharpest rates – or the squeaky ones who pick up the phone and haggle.
“Right now, there are 42 lenders offering at least one variable rate under 5.25 per cent on the Canstar database. This means if you’re an owner-occupier, there’s very little reason why you can’t aim for a rate under this mark.
“With a dark cloud now hanging over the possibility of further cuts, the question for some borrowers will be whether it’s now time to switch back to fixing. After all, the majority of lenders’ lowest rates are fixed ones, with rates on Canstar as low as 4.74 per cent for a 2-year term.
“Fixing isn’t for everyone and it comes with greater restrictions, but for some people, locking in certainty will be the peace of mind they’re looking for.
“Borrowers should weigh these options carefully to decide what works best for their situation.
“Whatever you do, do something as opposed to nothing at all. For many people, their home is their biggest asset but also their biggest burden.
← Mobile/tablet users, scroll sideways to view full table →
| Lowest variable rates on Canstar database | ||
|---|---|---|
| Lender | Rates from | Key conditions |
| Horizon Bank | 4.99% | First home buyer only, 30% deposit |
| G&C Mutual, Unity Bank | 4.99% | First home buyer only, 5% deposit |
| In1Bank | 5.08% | Min 50% deposit |
| Pacific Mortgage Group | 5.09% | Min 40% deposit |
| Police Bank | 5.09% | First home buyer only |
Source: Canstar. Note the above rates are for owner-occupiers paying principal and interest. Excludes green loans and introductory variable rate loans.
| Lowest fixed rates | ||
|---|---|---|
| Term | Lender | Rates from |
| 1-year | SWS Bank | 4.69% |
| 2-year | Australian Mutual Bank, Pacific Mortgage Group | 4.74% |
| 3-year | Australian Mutual Bank | 4.74% |
| 4-year | Teachers Mutual Group, Freedom Lend | 5.24% |
| 5-year | Australian Mutual Bank | 5.19% |
Source: Canstar. Note the above rates are for owner-occupiers paying principal and interest. Excludes green loans and introductory variable rate loans.
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
