Everything You Need to Know About Investment Fixed Rates

Locking in a Fixed Rate When You're Building Your First Investment Position

A fixed rate investment loan gives you the same interest rate for a set period, typically between one and five years. For paramedics in the early stages of property investment, fixed rates offer predictable repayments during the period when rental income matters most and cash flow is still tight.

Consider a paramedic who secures their first rental property and chooses a three-year fixed rate at 5.8 per cent on an interest-only loan. Monthly repayments stay the same regardless of rate movements. If variable rates climb to 6.5 per cent during that period, the fixed rate saves around $175 per month on a loan amount of $450,000. That difference covers body corporate fees or a portion of property management costs without affecting your take-home pay.

The real value of fixing early is protection during the initial years when you're adjusting to the demands of managing rental property alongside shift work. Fixed repayments mean you can model cash flow accurately and know exactly what's coming out of your account each fortnight. If the property has a vacancy or needs unexpected repairs, you're not also dealing with a rate increase in the same month.

Timing the fixed rate decision around your career stage matters. Paramedics in their first few years after qualification often have rising incomes as they move through pay scales and take on additional shifts. Fixing a rate early locks in your borrowing costs while your salary grows, which improves your debt serviceability over time without needing to refinance.

How Negative Gearing Rules Changed From 1 July 2027

Under legislation passed in mid-2026, rental losses on most residential investment properties purchased after 12 May 2026 can no longer be offset against your paramedic salary from 1 July 2027. Those losses are quarantined and can only be used against future rental income or capital gains on residential property. Properties purchased before that date remain fully negatively geared under the old rules.

If you bought an investment property before 12 May 2026, you can still claim the full rental loss against your wages each year, which reduces your taxable income and often results in a tax refund. If you bought after that date, the loss is carried forward but doesn't reduce your tax bill in the year it occurs. The only exception is if you purchased an eligible new build dwelling, which retains access to negative gearing for the first investor.

This means the value of a fixed rate shifts depending on when you bought. For properties acquired before the cut-off, a fixed rate that sits below the variable rate preserves your negative gearing benefit by keeping interest costs lower while still allowing you to claim the full loss. For properties acquired after the cut-off, a fixed rate provides cash flow certainty but doesn't deliver the same immediate tax outcome because the loss is quarantined regardless.

Fixed Rates for Mid-Career Investors With Multiple Properties

Once you hold more than one investment property, your approach to fixed rates changes. You're no longer focused purely on protecting cash flow on a single loan. Instead, you're managing portfolio risk and positioning yourself to release equity or expand further when the opportunity arises.

A common approach is to fix a portion of your total investment debt while leaving the rest on a variable rate. In a scenario where a paramedic holds two rental properties with a combined loan amount of $800,000, they might fix $500,000 across both loans for three years and leave $300,000 variable. This structure provides stability on the majority of repayments while retaining flexibility to make extra repayments or access offset on the variable portion.

The advantage of a split structure becomes clear when you want to expand your property portfolio or refinance one property without triggering break costs on the entire debt. Fixed rate break costs are calculated based on the difference between your fixed rate and the current wholesale rate, multiplied by the remaining fixed term. If you lock in the entire portfolio and then need to refinance 18 months later, the break cost can run into the tens of thousands. Fixing only part of your debt limits that exposure.

Mid-career paramedics also benefit from fixing at different intervals. Rather than fixing all investment debt at once for the same term, stagger the fixed periods so that one loan expires each year. This allows you to review and adjust your strategy regularly without being locked into a single decision made several years earlier. If one fixed term ends and rates have dropped, you can refix at a lower rate or switch to variable. If rates have climbed, the other fixed loans are still protecting you.

Using Fixed Rates to Support Equity Release and Portfolio Growth

When you're ready to use equity from an existing investment property to fund the deposit on the next one, the structure of your fixed rate loan matters. Lenders calculate equity release based on the current value of the property less the outstanding loan balance. If your investment loan is fully fixed and you want to increase the loan amount to access equity, you'll need to either break the fixed loan or wait until the fixed term expires.

Some lenders allow you to split the new borrowing into a separate loan account that sits on a variable rate, leaving the original fixed loan untouched. This avoids break costs while still giving you access to equity. Other lenders require the entire loan to be refinanced as a single facility, which triggers a break cost calculation if you're still within the fixed period.

For paramedics planning to grow their portfolio over the next few years, choosing a shorter fixed term or maintaining a variable rate component on each investment loan provides more flexibility. A two-year fixed term means you're never more than 24 months away from being able to restructure or refinance without penalty. A three-year or five-year fix works when you're confident you won't need to access equity during that period, or when you're prioritising repayment certainty over flexibility.

Debt serviceability is also affected by fixed rates during the equity release process. Lenders assess your ability to service additional borrowing using a buffer rate that sits at least three percentage points above the loan product rate. If you're adding a new loan on top of existing fixed debt, the lender includes the fixed repayments in the serviceability calculation at the buffered rate, even though your actual repayments are lower. This can reduce your borrowing capacity compared to holding variable debt, where the buffer is applied to a rate that's already closer to the assessment rate.

Fixed Rate Considerations for Paramedics Approaching Retirement

As you move into the later stages of your career, the goal often shifts from portfolio growth to consolidation and debt reduction. Fixed rates can still play a role, but the focus is on aligning the loan structure with your plans for the property and your expected income changes over the next five to ten years.

If you're planning to sell one or more investment properties within the next few years, avoid locking in a long fixed term. Break costs on a fixed loan can eat into your sale proceeds, particularly if rates have fallen since you fixed. A variable rate or a short fixed term of one to two years gives you the flexibility to sell and repay the loan without penalty.

For properties you intend to hold into retirement, switching from interest-only to principal and interest repayments during the final years of your career reduces the loan balance before your income drops. Some paramedics choose to fix the rate at the point they switch to principal and interest, which locks in a predictable repayment amount during the transition period. This approach works well if you're in the final five years before retirement and want certainty over how much debt will remain when you finish work.

Another consideration is the interaction between fixed investment loans and the capital gains tax changes that took effect from 1 July 2027. For properties held before that date, the existing 50 per cent CGT discount applies to gains accruing before 1 July 2027, while gains after that date are taxed under the new indexed cost base method with a 30 per cent minimum tax rate. Holding a fixed rate during this period doesn't change the tax treatment, but it does lock in your interest deductions at a known rate, which can be useful for tax planning if you're considering a sale in the near term.

Why Interest-Only Fixed Loans Are Common for Investors

Most paramedics who invest in property choose interest-only repayments rather than principal and interest, particularly in the early years. An interest-only investment loan keeps monthly repayments lower, which improves cash flow and makes it easier to hold the property during vacancies or high-maintenance periods.

You can fix an interest-only loan for up to five years with most lenders, although the interest rate on a fixed interest-only loan is often slightly higher than the rate on a fixed principal and interest loan for the same term. The difference is usually between 0.1 and 0.3 percentage points, which translates to around $40 to $120 per month on a loan amount of $450,000.

The reason investors favour interest-only is that it allows them to direct surplus cash flow toward paying down non-deductible debt, such as an owner-occupied home loan, or toward building a deposit for the next investment property. Paying down the principal on an investment loan reduces your debt, but it also reduces your tax-deductible interest over time. For paramedics in higher tax brackets, preserving the deductible debt and focusing surplus repayments on non-deductible debt delivers a stronger after-tax outcome.

Interest-only periods are typically offered for five years at a time, after which the loan either reverts to principal and interest or can be extended for another interest-only term subject to lender approval. If you fix the rate at the start of a five-year interest-only period, the fixed term and the interest-only period often expire at the same time, which gives you a natural point to review the loan structure and decide whether to refix, switch to variable, or move to principal and interest repayments.

What Happens When Your Fixed Rate Expires

When a fixed rate term ends, the loan automatically rolls onto the lender's standard variable rate unless you take action before the expiry date. Most lenders contact you around 30 to 60 days before the fixed term expires and offer you the option to refix at the current fixed rates or remain on the variable rate.

The variable rate your loan rolls onto is usually higher than the discounted variable rate offered to new borrowers. This means that doing nothing at fixed rate expiry often results in a rate increase even if market rates haven't moved. For paramedics with investment loans, this is the time to review whether your current lender still offers competitive rates or whether refinancing to a new lender delivers lower repayments.

If you're planning to refinance your investment loan, starting the process at least 60 days before the fixed term expires gives you time to compare offers, submit an application, and settle the new loan before the old fixed rate rolls off. If you miss the window and the loan reverts to variable, you can still refinance, but you'll be paying the higher variable rate in the interim period between expiry and settlement of the new loan.

Refinancing at expiry also gives you the opportunity to restructure the loan. You might choose to extend the interest-only period for another five years, increase the loan amount to access equity, or consolidate multiple investment loans into a single facility with a lower rate. Lenders reassess your serviceability at the time of refinance, so your current income, existing debts, and the updated property value all factor into the approval.

Choosing Between One, Three, and Five Year Fixed Terms

The length of the fixed term you choose depends on your risk tolerance, your plans for the property, and your view on where interest rates are heading. Shorter fixed terms offer less protection but more flexibility. Longer fixed terms lock in certainty but limit your ability to adjust the loan structure without cost.

A one-year fixed rate is useful when rates are falling or expected to fall. You get a small reduction compared to the variable rate, and you're only locked in for 12 months. If rates drop further, you can refix at a lower rate or switch to variable at the end of the term. The downside is that if rates rise sharply during that year, you're only protected for a short period.

A three-year fixed rate is the most commonly chosen term for investment loans. It provides a meaningful period of repayment certainty without locking you in for so long that your circumstances are likely to change. Three years is long enough to ride out most rate cycles but short enough that you can reassess your portfolio strategy at the end of the term without having to wait too long.

A five-year fixed rate makes sense when rates are low and you want maximum protection against future increases. The trade-off is reduced flexibility. If your circumstances change, such as needing to sell the property, access equity, or refinance for a lower rate, you'll face break costs. Five-year fixed rates also tend to be priced higher than three-year rates because the lender is taking on more interest rate risk over a longer period.

For paramedics holding multiple investment properties, fixing different loans for different terms creates a rolling fixed rate structure. One property might be fixed for two years, another for three, and a third on variable. This spreads your exposure and ensures that you're never fully locked in across your entire portfolio at once.

Making the Fixed Rate Decision That Fits Your Stage

Call one of our team or book an appointment at a time that works for you. We'll review your current investment position, your income, and your plans for the next few years, then structure your loan to match where you are and where you're heading.

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