Sign up for our FREE 8-week course to get on the property ladder.
10 year fixed home loan rates
In Australia, ten years is considered a long period to fix your home loan. But it is an option, albeit a rare one.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Most Australian borrowers fix their home loan rate for 1 to 5 years. Only rarely do people lock in their rates for a longer period, for a number of reasons:
- Not all banks offer 10-year fixed rate home loans.
- The longer you fix, the higher the interest rate tends to be.
- It can be difficult and expensive to exit the loan early, such as if you decide to sell the property.
- There's no opportunity to refinance during those 10-years, without paying break costs.
There are a handful of 10-year fixed rate loans on the market for borrowers who want to know exactly what their rate will be for many years to come. We explore how these loans work, and what the pros and cons are.
What is a 10 year fixed rate home loan?
When you get a 10-year fixed rate home loan, you lock in the certainty of knowing that your repayments will remain the same for 10 years.
The interest rate remains the same regardless of that changes that happen to variable rates during that time. Whether interest rates increase or decrease, your rate and yiour repayment stays the same for 10 years.
As with any regular home loan, you borrow money and you make repayments to pay off the balance as well as the interest it attracts. When you get a 10 year fixed rate home loan, the interest the loan amount attracts remains the same for the first 10 years of the loan term, after which it changes to a variable rate. During the first 10 years, your repayments remain the same because the interest charged does not change.
While most variable rate home loans enable borrowers to make extra repayments, this is not the case with fixed rate loans. Even if a fixed rate home loan allows you to make extra repayments, there's a good chance that it comes with an annual maximum extra repayment cap of between $10,000 to $25,000.
What are the different types of home loans that I can fix for 10 years?
- Basic home loans: A 10-year fixed rate basic home loan is offers little in terms of flexibility and features, will come with competitive interest rates and lower fees.
- Full-featured home loans: These loans offer repayment flexibility, so you can make extra repayments and perhaps even uses a partial offset account – for a premium price.
- Low doc loans: Self-employed borrowers and investors who can't provide all the required paperwork for a conventional loan can apply for low documentation loans. You can often apply with a lower deposit and higher Loan to Value Ratio (LVR), but interest rates are higher.
- Bad credit home loans: These loans, as implied by the title, are for people who have poor credit histories. Finding a 10-year fixed rate home loan if you have poor credit can be quite a challenge; expect to pay a high interest rate, if these are available at all.
- Package home loans: Package loans normally come with an annual fee of around, but they offer interest rate discounts and other benefits, like a fee waiver on a credit card and insurance premium discounts.
How to compare long term fixed rate home loans
1. Compare the advertised interest rates and comparison rates
This is the obvious starting point when you compare home loans, but don't limit your decision making based on this parameter alone. When comparing interest rates, take into account the fact that advertised interest rates don't account for ongoing account-keeping fees. Instead, comparison rates give a better indication of what to expect when you're repaying your loan.
2. Look at the features you want
While fixed rate home loans don't normally offer as many features as variable rate loans, you can still find alternatives that offer different features. Some 10-year fixed rate loans allow you to make extra repayments but they generally have annual caps in place. If you're making extra repayments, you can look for a facility to redraw these funds. An offset account allows you to save how much you pay in the form of interest, but while certain variable rate loans come with a 100% offset account, a fixed rate home loan might not offer more than a 40% or 50% offset account.
3. Take not of the fees
Applying for a home loan and maintaining it requires that you pay fees in some form or the other from time to time. Some of the fees you might have to pay include an application fee, rate lock fee, valuation fee, loan establishment fee, discharge fee, annual fee, settlement fee, extra repayment fee and early exit fee. Fees aren't a bad thing if they will get you a home loan with a feature which will save you thousands in the long run. If a home loan has a fee, be sure to find out why this is being charged and if it's worth it.
Pros and cons of a 10 year fixed rate home loan
- Repayments won't change for 10 years. You can plan your budget effectively and you can even sign up for another fixed rate period at the end of the 10 years, if you wish.
- Protected from rising interest rates. If the Reserve Bank of Australia (RBA) increases the cash rate, or your lender hikes up home loan interest rates, you don't have to worry, because your rates are set in stone for 10 years.
- Extra repayments. While fixed rate home loans don't normally offer much flexibility, you can still find loans that allow you to make some extra repayments, as well as loans that come with linked offset accounts.
- No benefit when interest drops. If the RBA or your lender drops variable home loan interest rates, you don't benefit. If you locked in a 10-year rate in 2019 before interest rates dropped from around 4% to around 2%,
- Exit fees. If you decide to repay your loan ahead of schedule, or if you want to look for refinancing options, there's a good chance you'll have to pay considerably high exit fees.
- No offset or redraw. Fixed rates generally don't come with the option to add an offset account, where you 'offset' the loan balance with your savings. As your situation changes over time, the loss of this feature could be costly.
Things to consider before jumping in
Taking out a 10 year fixed rate home loan requires you to think hard about the 10 year period because unlike a year or two, 10 years doesn't just rush by. If you think you might move within the next decade, you'll have to exit your loan before its fixed period comes to a close, so it’s best you avoid taking a fixed rate loan in such a scenario.
If you're not sure about how your finances might look in the years to come, avoiding locking in an interest rate for the longest possible duration is a good idea.
Frequently asked questions about 10 year fixed rate home loans
What happens to the interest rate at the end of the 10 year period?
At the end of the 10 year period your loan will usually revert to the standard variable rate offered by your lender. Alternatively, you can elect to fix your home loan for another fixed period, which may be 10 years or shorter depending on what your lender offers.
Can I split my loan into fixed and variable components?
Yes, some loans allow you to split the loan amount so one portion attracts a fixed rate and the other portion attracts a variable rate. This allows you to benefit from both rates and at the end of the fixed rate term period, the entire amount attracts a standard variable rate.
Why do fixed rate loans attract higher interest than variable rate loans?
When banks offer fixed rate loans they have to factor in the risk of interest rates dropping in the future, and this is essentially why they attract higher interest rates. Besides, these loans also offer borrowers the convenience of fixed repayments.
More guides on Finder
Super low 1.59% home loan rate – but what’s the catch?
Greater Bank has dropped some of their fixed rate home loans to just 1.59%. Find out if you're eligible to save thousands on your mortgage.
I’m a home loans expert, so why am I getting ripped off?
I'm not alone - 82% of Australian homeowners feel "ripped off". Here's how I saved thousands.
Australian Unity Wealth Builder Investor Package Variable Home Loan
Discover the features and benefits of Australian Unity’s Wealth Builder Investor Package variable rate home loan.
Salt and Lime Debt Consolidation Loan
Looking to consolidate your debt? Salt and Lime offers fee-free loans, same-day funding, and the ability to earn discounts on your interest over the life of the loan. Apply today.
RBA cash rate hold: Why Aussies are refinancing in record numbers
As the low home loan rate environment endures, Australian borrowers refinanced $17.2 billion in 1 month.
G&C Mutual Bank Fixed Rate Home Loan
A review of G&C Mutual Bank’s fixed rate home loan. Discover the features and benefits of this loan.
Great Southern Bank Home Saver Account
The Home Saver Account offers an ongoing bonus rate when you meet the account criteria. Learn how to get the bonus rate and apply online.
September’s best balance transfer credit card offers
Standard credit card interest rates haven't changed much, but these balance transfer offers give you a way to save with 0% interest for up to 36 months.
From $10K debt to $50K saved: How I fixed my finances in 4 years
How Eliza paid down her debt, cut up her credit card, saved $50,000 and started investing in a few short years (all while renting in Sydney!).
Lowest home loan rates
Learn how to look for the cheapest home loans and how to pick them out from a broad selection on offer.
Home Loan OffersImportant Information*
Find the right home loan now
Ask an Expert