fixed rate home loans

Fix appeal: why so many borrowers want it

Rates and fees last updated on uncovers why one in five borrowers fix their home loan interest rates and the big appeal of fixing.

There has been a definite and considerable rise in the number of borrowers looking for loans with fixed rates. Borrowers have scores of option from which to choose and a number of these options offer fixed rates for up to five years. It should come as no surprise then that around one in five borrowers opted for fixed rates in July 2013.

Fixed rate loans in 2013

The statistic of one in five borrowers opting for fixed rates is double the amount of where it stood in July 2012 and it accounts for nearly 20% of all home loans approved in July 2013. As per data released by the Australian Bureau of Statistics, July 2013 was the peak period when fixed home loans were being financed. Close to 10,000 fixed home loans were approved in July 2013 and this was 120% more in comparison to fixed loans approved in July 2012.

Fixed rate loans through gives you the ability to compare home loans from just about every lender and more and more borrowers have uncovered the appeal of fixed rate loans. As per data collected by in September 2013, this trend has almost doubled, rising by 87%, in comparison to those applying for variable rate loans.

Pros and cons of fixed rate home loans

Should you think about opting for a fixed home loan?

Choosing between a fixed and variable home loan is not easy and while borrowers have some great fixed rate options from which to choose now, many still regard the process as a bit of a gamble. However, borrowers should be aware that in some cases you can even find fixed rates lower than variable rates.

Since fixed rates are traditionally higher when compared to variable rates, existing low fixed rates are attracting a number of prospective borrowers. If you personally know five people who took home loans in the last year, there’s a very good possibility that one of them has a fixed home loan.

If you think there could be a change in your financial situation in the following few years, such as getting married or you plan to have children, you might want to consider opting for a fixed rate loan, since doing so offers certainty in terms of how much you have to pay. On the other hand, if rates continue to drop then you might miss out on savings that would accompany a variable home loan, so the gamble does remain.

Comparing existing home loan alternatives suggests that you compare your options well before you make a decision. In September 2013, Newcastle Permanent’s two-year fixed rate, for instance, is the lowest you’ll could on and their three-year fixed rate tops the three-year bracket.

For people thinking about looking for fixed rate home loans, this could well be as good a time as any. What should go without saying is that this process requires extensive research and due diligence and the team can help you with your comparison.

Michelle Hutchison

Michelle is Money Expert at She's the go to for information, tips or trends in the home loan market or with credit cards, savings accounts and personal loans. You can ask her about shopping deals and life or travel insurance too.

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