Cheapest fixed rate home loans

Rates and fees last updated on

Finding a cheap fixed rate home loan is easier than you think.

cheapfixedhomeloan

Fixed rate home loans are just like any other home loan but with one major difference. Where a variable rate home loan can fluctuate up and down based on your lender's reactions to the economy and the cost of funding, a fixed rate home loan has an interest rate which is set at the start of the loan and won’t change until the end of the fixed term. This is good news for people who want to be able to budget their finances and not be surprised by higher repayments.

Finding the cheapest home loan involves comparing different lenders and applying for the best offer. This could be based on different factors including features and accessibility. The best kind of cheap home loan will be one that works the best for your personal and financial situation.

What is a cheap fixed rate home loan?

A cheap fixed rate home loan is a fixed rate home loan which offers exceptional value. The definition of this will depend on what you see as offering the best value in a home loan - a low interest rate, low upfront fees, low ongoing fees, or a combination of two or all of these factors.


Cheap fixed rate home loans comparison

Rates last updated August 24th, 2017
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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier Special Rate, P&I)
Owner-occupiers can lock in a competitive rate with no ongoing fees. Conditions apply.
3.74% 4.85% $0 $0 p.a. 95% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.69% 4.86% $0 $395 p.a. 90% Go to site More info
Tic:Toc Live in Fixed Rate Home Loan - 1 Year (Owner Occupier)
Apply online for this fixed rate, low-fee loan with redraw facilities and an optional offset account.
3.94% 3.71% $0 $0 p.a. 80% Go to site More info
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier)
A one year fixed rate offer with no ongoing bank fees.
3.69% 4.15% $395 $0 p.a. 80% Go to site More info
Community First Fixed Home Loan - 3 Years Fixed Owner Occupier special offer (New Loans only)
A limited time fixed rate special with no monthly or annual fees plus a 100% offset account.
3.89% 4.97% $600 $0 p.a. 95% Go to site More info
3.79% 4.07% $500 $0 p.a. 95% Go to site More info
Tic:Toc Live in Loan Fixed Rate - 3 Years (Owner Occupier)
A fixed rate loan with free redraws, few ongoing fees. Apply online with a fast approval process.
4.32% 3.85% $0 $0 p.a. 80% Go to site More info
ME Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier, P&I)
Get a competitive 2-year fixed rate with no application or ongoing fees.
3.74% 4.81% $0 $0 p.a. 95% Go to site More info
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier)
An online home loan offer with a fixed interest offer for 3 years.
3.99% 4.08% $395 $0 p.a. 80% Go to site More info
QT Mutual Bank Choices Package Fixed Loan - 2 Years Fixed (Owner Occupier)
A fixed rate package loan with a competitive rate and a split loan facility. Note that to be eligible for this loan you must be QLD resident.
3.72% 4.41% $0 $395 p.a. 95% Go to site More info
Select Encompass Credit Union Special Offer 2 Year Fixed Rate Home Loan
A fixed rate loan with limited fees and a competitive interest rate.
3.74% 4.15% $0 $0 p.a. 95% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier Special Rate, P&I)
A limited time fixed rate home loan with extra repayment abilities. Conditions apply.
3.79% 4.75% $0 $0 p.a. 95% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.88% 4.89% $0 $395 p.a. 95% Go to site More info
4.24% 4.81% $0 $0 p.a. 95% Go to site More info
ME Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier, P&I)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
3.99% 4.77% $0 $0 p.a. 95% Go to site More info
Aussie Select Basic Fixed Rate Home Loan - 2 Year Fixed LVR up to 80% (Owner Occupier)
A two year fixed rate home loan with no annual or application fees.
3.99% 3.84% $0 $0 p.a. 80% Enquire now More info
NAB Choice Package Home Loan - 5 Year Fixed (Owner Occupier P&I)
A competitive loan with flexible features. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.59% 5.01% $0 $395 p.a. 95% Go to site More info
ANZ Breakfree Package Home Loan - 2 Year Fixed (Owner Occupier, P&I)
This 2 year fixed ANZ Breakfree Package rate comes with package discount and product bundle. Terms and conditions, package fee and fees, charges & eligibility criteria apply.
3.88% 4.98% $0 $395 p.a. 95% Enquire now More info
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier) P&I
A package home loan with fee free extra repayments available during the fixed term.
3.99% 4.99% $0 $395 p.a. 95% Enquire now More info
ANZ Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier, P&I)
Get a 2-year fixed rate with flexible repayment options to help you save.
4.03% 5.08% $600 $10 monthly ($120 p.a.) 95% Enquire now More info
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate (Owner Occupier, P&I)
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cashback available for refinancers. Conditions apply.
3.99% 4.98% $0 $395 p.a. 95% Enquire now More info
Heritage Bank Fixed Rate Home Loan - 2 Year Fixed Rate (Owner Occupier) New Customers Only
Enjoy a 2-year fixed rate with interest-only options and a partial offset account.
3.99% 5.07% $600 $8 monthly ($96 p.a.) 95% Enquire now More info
Auswide Bank Fixed Home Loan Plus with Freedom Package - 3 Year Fixed $150k to $249k LVR <= 90% (Owner Occupier)
Lock your rate in for 3 years and enjoy a discount on your loan of $150,000 -$249,000.
4.09% 4.98% $0 $395 p.a. 90% Enquire now More info
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years, P&I
Lock in a discounted fixed rate with a low service fee.
3.99% 4.90% $0 $395 p.a. 95% Enquire now More info

How do you compare cheap fixed rate home loans?

People's needs vary, and the kind of home loan that you need may be different from someone else's. Several factors also need to be considered when comparing home loans, including your financial capacity, loan features, repayment schedule and the size of your deposit. Please see below for a detailed list:

  • Interest rates. This is one of the most important factors when finding a cheap home loan. The interest rate you pay will have a direct bearing on the repayments you must make over the course of your loan. The comparison rate is required by law to be displayed next to the advertised rate, and gives a good indication of the total cost of the loan when fees are added to it.
  • Features. Some fixed rate home loans will not offer the full range of features available on a variable rate home loan, including the ability to make unlimited extra repayments and use linked 100% offset accounts, although some fixed rate home loans do offer 100% offset accounts.
  • Fees. Regardless of your definition of cheap, you should always know what fees will be charged as part of your home loan. These include upfront fees, such as application, valuation and legal fees, and also ongoing fees like monthly and annual fees. As mentioned above, the comparison rate gives you some idea of what your rate will look like once fees are added into the equation.
  • Fixed term length. This is the period that your loan term runs for, and is one of the factors determining your repayment amount. A longer term usually means a low repayment amount, which is beneficial if you are on a tight budget. However, you may want to calculate the cost as sometimes you might end up paying more in the long run.

Pros and cons of a cheap fixed rate home loan

A fixed home loan rate has its own ups and downs. These can be factors that will affect your decision when it comes to picking the right home loan for you.

Pros

  • Security. Your rate, and therefore repayment amounts have been determined from the start and will not be affected by your lender's decision to raise or lower rates in response to economical factors. If the market moves up, your rates and repayments will stay the same.
  • Accurate budgeting. It's easier to budget your finances when it comes to repaying your mortgage because you know how much you are paying every time.
  • Cheap. As the name of this article suggests, these home loans should save you money in terms of rates and fees.

Cons

  • Less rate flexibility. You cannot take advantage of low market rates if rates change.
  • Fewer features. Some features of variable rate loans are generally not available with a fixed home loan, including flexible payment plans and offset accounts. However some fixed rate home loans are now offering offset accounts.
  • Additional repayment flexibility. Most fixed home loans do not allow extra payments, or will charge additional fees should the option be available.
  • Higher fees. A hefty fee may be charged by the lender if you end the loan term prematurely.

Things to be wary of before applying for a cheap fixed rate home loan

As good as a cheap fixed home loan sounds, you should know that exiting a fixed rate home loan before the fixed term ends can come with expensive break fees. These also apply in instances where you find yourself ending the loan agreement prematurely, for example if you sell the property that you purchased with your loan. Even if you can pay the full amount, your lender will impose some fees to compensate for the loss of the potential earnings they could have with the loan.

Before signing the contract, ask the lender what their conditions are for premature loan cancellation, and if it's possible to waive once you reach a certain amount of the loan that has been repaid.

About cheapest home loans

Frequently asked questions about cheap fixed rate home loans

Here are a few things you might be wondering about cheap fixed rate home loans.

Loan terms for fixed home rates vary. They can go from a span of a year up to five years, or for longer terms like 10 or 15 years. The interest rate varies on the length of the term, and it may also affect the features that may or may not be included in the loan.

Yes, it is possible for a discharged bankrupt to get an affordable fixed home loan. The process and tips are very similar to regular home loans, but you have to pay extra attention to the terms and conditions, as well as to the fees and charges that will apply, including the interest rate. Keep in mind that discharged bankrupts will usually have to approach a specialist lender for a home loan.

Some lenders offer the option of repayment holidays or times when your loan repayment schedule is suspended for a brief period of time. The length of this can range from three months up to a year. However, this feature is not always offered to most loans, especially if you have a basic or cheap loan. The best way to find out if you have this option available with your loan is to ask.

Cheap fixed home loan rates are not difficult to come by. Your first step is to start looking for lenders. Many financial websites offer comparisons of different lenders, and you can use this to begin. Don’t forget to ask the lender questions to make sure everything is clear and there won’t be any unpleasant surprises along the way.

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at finder.com.au. Talk to him to find out more about home loans.

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