Why 30 year fixed mortgage rates don’t exist in Australia

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What is a 30-year fixed rate home loan?

A fixed rate home loan has a flat interest rate that doesn't change for a set amount of time. In Australia that's usually a term of 1 to 5 years.

In countries like the USA, 30-year fixed rate mortgages are very popular. But you can't get 30-year fixed rate home loans in Australia.

Why aren't 30-year fixed rates offered in Australia?

The main reason 30-year fixed rates don't exist in Australia is the lack of a well-developed secondary mortgage market.

In the United States, home loans are guaranteed by two government entities: the Federal National Mortgage Association, or Fannie Mae, and the Federal Home Loan Mortgage Corporation, or Freddie Mac.

These government agencies buy home loans from lenders, bundle them as securities and then sell the securities to investors. The government assumes the risk for the home loans.

In Australia there's no equivalent protection. So long term fixed rate loans represent a risk to lenders. If rates change dramatically, a bank could be stuck with a 30-year loan term that's no longer favourable to them.

Whereas with a variable rate loan, lenders can simply increase or decrease the rate borrowers get in line with market movements.

What is the longest fixed mortgage rate in Australia?

10 years is the longest fixed home loan rate term on offer in Australia. And there's only 2 lenders that offer 10-year fixed rate home loans, so they're very rare.

These home loans have much higher interest rates than other Australian home loans too.

The risks of lengthy fixed term home loans

Most people fix their home loan rate because they want to know exactly how much they have to pay each month and forget about rate rises. But when you fix for a very long time lenders charge higher interest rates. It gets very expensive.

And there are other problems with long fixed terms.

Lack of flexibility and break costs

If you decide you want to sell your property or refinance your home loan, a long fixed term makes that harder. This is because lenders charge a break fee when you exit a fixed rate home loan before the fixed term ends.

The break fee is higher if your fixed rate is longer. It can end up costing you thousands of dollars.

According to NAB, this is because of how fixed rate loans are funded. The lender's funding costs remain fixed, so if you repaid the loan early the lender would lose money.

Fixed rate break costs are "a kind of penalty for changing a fixed rate loan early, and it's designed to protect the lender from losses."

Long term fixed rate home loans

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Finder Score	Interest Rate p.a.	Comparison Rate p.a.	Fees	Custom Badges	Monthly Payment
Finder score 3.3 Basic ANZ Fixed Rate Home Loan	Finder score 3.3 Basic	Interest Rate 7.24%	Comparison Rate 7.02%	Fees Application: $0 Ongoing: $120 p.a.	Interest only 10Y Fixed20% min. equityOwner-occupier	Monthly Payment $1,024 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 2.8 Basic Pepper Money Essential Prime Full Doc Fixed Home Loan	Finder score 2.8 Basic	Interest Rate 7.19%	Comparison Rate 7.07%	Fees Application: $599 Ongoing: $120 p.a.	Principal & Interest 10Y Fixed45% min. equityInvestment	Monthly Payment $1,018 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 4.5 Basic Pepper Money Essential Prime Full Doc Fixed Home Loan	Finder score 4.5 Basic	Interest Rate 6.99%	Comparison Rate 6.87%	Fees Application: $599 Ongoing: $0 p.a.	Principal & Interest 10Y Fixed45% min. equityOwner-occupier	Monthly Payment $998 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 4 Basic ANZ Fixed Rate Home Loan	Finder score 4 Basic	Interest Rate 7.24%	Comparison Rate 7.04%	Fees Application: $0 Ongoing: $120 p.a.	Principal & Interest 10Y Fixed20% min. equityOwner-occupier	Monthly Payment $1,024 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 2 Basic ANZ Fixed Rate Home Loan	Finder score 2 Basic	Interest Rate 7.69%	Comparison Rate 7.40%	Fees Application: $0 Ongoing: $120 p.a.	Interest only 10Y Fixed10% min. equityOwner-occupier	Monthly Payment $1,070 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 4 Basic ANZ Fixed Rate Home Loan	Finder score 4 Basic	Interest Rate 7.24%	Comparison Rate 7.20%	Fees Application: $0 Ongoing: $120 p.a.	Interest only 10Y Fixed20% min. equityInvestment	Monthly Payment $1,024 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 2.7 Basic ANZ Fixed Rate Home Loan	Finder score 2.7 Basic	Interest Rate 7.69%	Comparison Rate 7.58%	Fees Application: $0 Ongoing: $120 p.a.	Interest only 10Y Fixed10% min. equityInvestment	Monthly Payment $1,070 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 3 Basic ANZ Fixed Rate Home Loan	Finder score 3 Basic	Interest Rate 7.69%	Comparison Rate 7.43%	Fees Application: $0 Ongoing: $120 p.a.	Principal & Interest 10Y Fixed10% min. equityOwner-occupier	Monthly Payment $1,070 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 2.8 Basic ANZ Fixed Rate Home Loan	Finder score 2.8 Basic	Interest Rate 7.24%	Comparison Rate 7.20%	Fees Application: $0 Ongoing: $120 p.a.	Principal & Interest 10Y Fixed20% min. equityInvestment	Monthly Payment $1,024 per month	Enquire nowMore info Compare product selection Compare	loading
Finder score 1.5 Basic ANZ Fixed Rate Home Loan	Finder score 1.5 Basic	Interest Rate 7.69%	Comparison Rate 7.59%	Fees Application: $0 Ongoing: $120 p.a.	Principal & Interest 10Y Fixed10% min. equityInvestment	Monthly Payment $1,070 per month	Enquire nowMore info Compare product selection Compare	loading

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Frequently asked questions

• Can I get a 30 year fixed-rate mortgage in Australia?

  Australian banks do not offer a 30-year fixed rate. Typical fixed-rate terms on Australian home loans range from 1 year to 5 years. In countries like the U.S., 30-year fixed rates are more common.

• Is a 30 year fixed loan a good idea?

  A 30-year fixed home loan would last for the entire duration of home ownership. Australia doesn't currently offer 30-year fixed loan terms, but if they did, they would offer stability with predictable repayments. Our banks charge a fee to "break" a fixed loan and that fee is equal to how much the lender would lose from losing your interest and repayments for the remainder of the term – so if we did offer 30-year terms in Australia, they could be very expensive to end early.

• What is the average fixed mortgage rate?

  The average fixed mortgage rate in Australia ranges, but a 3-year term is very common. You can choose from 1, 2, 3, 4 or 5 year fixed terms.

Written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 669 Finder guides across topics including:

• Home loans
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• Personal finance
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Co-written by

Marc Terrano

Publisher

Marc Terrano is a lead publisher and growth marketer at Finder. He has previously worked at Finder as a publisher for frequent flyer points and home loans, and as a writer, podcast host and content marketer. Marc has a Bachelor of Communications (Journalism) from the University of Technology Sydney. He’s passionate about creating honest and simple reviews and comparisons to help everyone get value for money. See full bio