Why Two 95% Housing Australia Loans Can Have Very Different Interest Rates (And Why Both Borrowers Chose to Fix for Two Years)
Recently, I secured a 4.89% fixed rate for a client using the Home Guarantee Scheme at a 95% LVR.
Around the same time, other clients fixed at 5.19%, also at 95% LVR, under the same scheme.
Same LVR.
Same government guarantee.
Same market.
So why the difference?
And why did both sets of clients choose to fix for two years — even though they had offset accounts available?
The Real Difference Was Employment Risk
In 2026, lenders price risk, not just deposits.
While the Home Guarantee Scheme removes the need for LMI, it does not remove:
Employment risk
Income structure risk
Tenure risk
The key differentiators were:
Employment structure (PAYG vs contract / mixed income)
Time in current role
Industry risk as viewed by the lender
This is why one borrower was priced at 4.89%, while another landed at 5.19% — despite both being low-deposit, government-supported buyers.
Why the 4.89% Was Achievable
The borrower who secured 4.89% had:
Stable PAYG income
Solid tenure beyond probation
A low-risk employment profile
From a lender’s perspective, this reduced ongoing servicing risk, allowing sharper pricing even at a high LVR.
Why 5.19% Still Made Sense
The borrowers who fixed at 5.19%:
Had shorter employment tenure.
They were still considered good borrowers
Simply did not meet the criteria for a successful home loan for the 4.89% Lender.
Crucially, this wasn’t a “worse” outcome — we still requested a discount for the borrower.
Why Both Borrowers Chose to Fix for Two Years (Even With Offset Accounts)
This is where the strategy really comes together.
Both sets of clients understood:
They were entering the market at 95% LVR
They were realistically staying with their lender for at least two years
Early refinancing would not be cost-effective
The rate savings from fixing outweighed the flexibility of a fully variable loan
Even with offset accounts available, fixing allowed them to:
Lock in a lower interest rate
Maximise interest savings during the high-balance, early years of the loan
Utilise the Redraw Facility Instead of an Offset Account.
Create a clear review point once equity and employment tenure have improved.
Both Borrowers could make extra payments per year.
$20,000 with NAB
$25,000 with Newcastle Permanent Building Society.
This wasn’t about ignoring the offset — it was about prioritising guaranteed savings first.
Why This Matters in 2026
With inflation data still volatile and fixed rates already repricing higher:
Sub-5% outcomes are becoming rarer
Lenders are more selective on employment risk
Certainty has tangible value
For borrowers who know they’re staying put, fixing can be a powerful tool — even when offset accounts are part of the structure.
So… Is It Time for You to Fix Your Interest Rate?
Fixing may make sense if:
You’re buying at a high LVR
You’re early in your employment journey
You expect to stay with your lender for 2+ years
You want to lock in savings during the most expensive phase of your loan
Variable may suit you if:
You plan to refinance or invest soon
You rely heavily on offset for debt reduction
Flexibility is more valuable than certainty
And for many borrowers in 2026, a split loan remains the middle ground.
Final Thought
The difference between 4.89% and 5.19% wasn’t the scheme, the market, or timing.
It was how lenders assessed employment risk — and how borrowers aligned their loan structure with their reality.
Fixing isn’t about predicting rates.
It’s about making the most of the position you’re in right now.
If you’re unsure how your employment profile, equity position, or offset v redraw strategy should influence whether you fix or stay variable, that’s a conversation worth having before the next shift in the market.
To explore your options, you can book a complimentary discovery call with Principal Mortgage Broker Shona Stephenson.
Shona will walk you through the lending process, assess your borrowing capacity, and help you understand the application pathway and loan structures available to you — recommending the strategy that best fits your situation, goals and risk profile.
You’ll receive clear, practical guidance and the level of care and attention our clients consistently praise.
Best Foot Forward Mortgage Solutions
📞 0417 693 281
✉️ shona@bestff.com.au
🌐 https://www.bestff.com.au/
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