Home loans are front of mind for many Geelong borrowers as the Reserve Bank of Australia lifts the cash rate to 3.85% and lenders begin repricing fixed rate products. If you own a home in Geelong, now is the time to review your loan structure and understand how changing interest rates may affect your repayments and long-term plans.
The February RBA decision reflects ongoing concerns about persistent inflation and stronger than expected domestic demand, keeping underlying inflation above the Bank’s 2–3% target band. While future moves will depend on incoming data, markets are already pricing in the possibility of at least one more modest increase later in 2026 if inflation does not ease.
For borrowers, this creates a clear message: review, do not ignore.
What rising fixed rates are telling Geelong borrowers
In recent weeks, more than 50 lenders have increased fixed rates, with some major banks lifting three year fixed products by up to 0.7 percentage points. You may have noticed fewer fixed rates in the low 5% range and more starting in the higher 5% or even 6% range.
When banks lift fixed rates before the RBA moves again, they are effectively pricing in what they expect to happen over the next few years. Fixed rate loans lock in your interest rate for a set term, typically one to five years. At the time you sign, lenders must account for wholesale funding costs and anticipated RBA movements.
If they believe inflation or economic growth will push the cash rate higher, they adjust fixed rates early to protect their margins. In simple terms, rising fixed rates are a warning light, not just a price change.
A look at how rate cycles have played out before
Historically in Australia, fixed rates tend to rise in the months before or alongside cash rate tightening cycles. From the early 1990s through to the 2000s, fixed and variable rates climbed together when the RBA was in hiking mode, then gradually eased once inflation cooled.
More recently, during the 2022–2023 cycle, fixed rates jumped sharply as the RBA began lifting from near zero. Borrowers who fixed early often secured cheaper deals than those who waited.
If you review long term charts comparing three year fixed rates to the cash rate over the past 20 to 30 years, fixed rate increases usually precede or coincide with the start of a tightening phase, not the end.
For Geelong homeowners, this context matters. It reinforces that waiting for certainty can sometimes mean paying more.
Refinancing home loans Geelong in 2026
As we move further into 2026, we appear to be in a higher for longer phase. The cash rate was sitting at 3.6% prior to the February decision and is now 3.85%, with the door still open to further hikes if inflation remains stubborn.
If you have not reviewed your home loan recently, refinancing could help you adjust your loan structure and better align it with your current cash flow and risk tolerance.
When the RBA lifts the cash rate, variable rates typically follow. Fixed rates, however, may have already factored much of that move into their current pricing.
This means the window to lock in a lower fixed rate can close quickly once markets shift.
Fixed, variable or split
Locking in now may cost more than it did six months ago. However, it can provide certainty and protect you from further increases if the RBA moves again.
If you are currently on a variable loan and thinking about fixing later, higher fixed rates today may signal even higher pricing in the future if the outlook does not soften.
Many borrowers are now choosing a split strategy, such as 50/50 or 70/30 between fixed and variable. This approach allows you to hedge your risk. Part of your loan remains flexible, while another portion is protected from further rate rises.
The right structure depends on your income stability, household expenses and risk tolerance.
How to position yourself now
If fixed rates are moving up, it is time to review, not panic.
Start by checking your buffer. Run a stress test on your repayments at an additional 0.5% to 1.0% to see how your budget would cope. This gives you clarity and helps you make informed decisions.
With lenders repricing rapidly, there can be significant differences between products and policies. Comparing your options can help ensure your home loan remains competitive and aligned with your long term goals.
Take control of your home loan in Geelong
Interest rate movements are part of the property cycle, but your strategy does not have to be reactive. By understanding what rising fixed rates are signalling and reviewing your structure early, you can position yourself more confidently for 2026 and beyond.
If you have not reviewed your loan recently, now is the time. Speak with the team at Konnect Financial Services about your home loan options in Geelong and ensure your structure aligns with the current market conditions.
To arrange a personalised review, get in touch and take the next step towards a smarter home loan strategy.
