Fixed Rate Information

The fixed rate home loan rort

A fixed rate home loan may end up costing you more.

Although a popular option among borrowers, fixed home loans can actually end up costing you thousands of dollars extra in high interest rate charges. Fixed rate home loans can offer you the security you need for a long term loan, but for some loans, after the fixed period ends the interest rate reverts to a rate as much as 1.01 percentage points higher.

Statistics have revealed that more borrowers are choosing to fix their home loan rates. Data from the Australian Bureau of Statistics (ABS) shows that 92,251 fixed home loans were financed in the past 12 months to August 2013, which was 29,122 more than the previous year.

The average proportion of borrowers fixing their loans was 16% for this same time period, compared to 12% the year prior.

Compare the rates

If we take a look at rates in October 2013, the average three­ year fixed rate was 5.07% which reverted to 5.51% after the fixed period ended. There are several three­ year fixed loans that revert to higher than this—up to 6.19%. This includes all four of the major banks.

Compared to July 2011, before fixed loans began to fall, the average three­ year fixed rate of 7.38% was almost the same as the average revert rate of 7.41%. Revert rates for three­ year fixed home loans ranged up to 0.70 percentage points higher.

For instance, let’s take a typical $300,000 mortgage over 30 years with the average three­ year fixed home loan of 5.07 percent reverting to 5.51%. The extra cost after the fixed period would be about $81 per month. Over the remaining loan term of 27 years following the fixed period, this extra cost is potentially over $26,000.

Three year fixed rates and their revert rates

Average 3-year fixed rateAverage 3-year fixed revert rateDifference
July 20117.38%7.41%0.03%
October 20135.07%5.51%0.44%

Fixed home loan rate offers

Now more than ever borrowers need to be wary of attractive fixed loan offers as more are expected to lock in their rates. Fixed loans are great in that your repayments will remain the same during the fixed term, particularly when there’s talk of rising interest rates on the horizon following the latest inflation figures. And there are some very good value deals currently being offered, with three­ year fixed rates starting low. Keep in mind that fixed rate home loans are not necessarily the best value over a 30 year loan term if the revert rate is much higher.

Comparison of variable rate home loans

Rates last updated April 20th, 2018
$
Loan purpose
Offset account
Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.69%
3.69%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).
3.64%
3.66%
$0
$0 p.a.
80%
Pay no ongoing fees and enjoy a flexible repayment schedule, including the ability to make unlimited additional repayments without penalty.
3.59%
3.60%
$0
$0 p.a.
90%
Borrow up to 90% of the value of your property and pay no ongoing fees with this loan from a leading international bank.
3.69%
3.73%
$600
$0 p.a.
95%
Variable rate home loan from one of the big 4 banks. Available with just a 5% deposit.
3.49%
3.49%
$0
$0 p.a.
90%
Get a competitive variable rate with low fees. Add a 100% offset account for $10 a month. Available with a 10% deposit.
3.68%
3.69%
$0
$0 p.a.
95%
This variable rate loan offers flexible repayments and a redraw facility. Available with a 5% deposit.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Points on your mortgage (for a limited time, subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
3.52%
3.53%
$0
$0 p.a.
80%
Go from application to approval in as little as 20 minutes with a variable rate loan from this innovative online lender. Add a 100% offset account for $10 a month.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $1,200 cashback on this loan with a 100% offset account and a redraw facility.
3.68%
3.69%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
3.49%
3.52%
$500
$0 p.a.
95%
A loan that combines a competitive rate with a 100% offset account.
3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
Get a 100% offset account to save on interest charges, and pay no application fee.
3.64%
3.67%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
3.77%
3.81%
$200
$0 p.a.
95%
A simplified mortgage with a low interest rate and a redraw facility.
3.65%
3.66%
$0
$0 p.a.
80%
This special rate loan comes with no application or ongoing fees, and offers a flexible repayment schedule.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.59%
3.99%
$0
$395 p.a.
90%
A high maximum LVR home loan with redraw facility and additional payments.
3.69%
3.71%
$0
$0 p.a.
80%
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
3.72%
3.74%
$0
$0 p.a.
80%
Save on interest by taking advantage of a 100% offset account along with no ongoing fees or application fees.
3.62%
3.62%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).
3.69%
3.69%
$0
$0 p.a.
90%
Get a special discount for a limited time when you open an IMB Transaction Account. Face-to-face consultations available in NSW and ACT.
3.65%
3.66%
$0
$0 p.a.
90%
Offset up to $50,000 of the combined balances of your CUA Everyday Accounts and save on interest.
3.74%
3.74%
$0
$0 p.a.
90%
New customers can get a discounted variable rate and a fee-free redraw facility. NSW, QLD and ACT residents only.
3.84%
3.87%
$0
$0 p.a.
90%
Save on interest with a free 100% offset account and buy your property with just a 10% deposit.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule.
3.62%
3.62%
$0
$0 p.a.
95%
Free home and contents insurance for 1 year. Terms and conditions apply. QLD residents only.
3.78%
3.78%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.59%
3.99%
$0
$395 p.a.
95%
Get interest rate discounts and waived fees on this package loan with a 100% offset account.
3.74%
3.74%
$0
$0 p.a.
110%
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.97%
3.97%
$0
$0 p.a.
90%
A variable rate loan with a 100% offset account. Available with a 10% deposit.Face-to-face consultations available for NSW and ACT customers.
3.89%
3.91%
$0
$0 p.a.
80%
Borrow up to $2 million with this low investor rate. To get this discounted rate you must package the loan with your owner-occupier mortgage.
3.99%
4.02%
$0
$0 p.a.
80%
Investors can enjoy flexible repayment options and pay no application or ongoing fees.
3.79%
3.80%
$0
$0 p.a.
80%
Investors can go from application to approval in as little as 20 minutes with this innovative online lender.
4.15%
4.76%
$600
$0 p.a.
90%
A competitive rate with no ongoing fee and borrow up to 90% LVR.
4.19%
4.21%
$0
$0 p.a.
80%
Investors will pay no application or ongoing fees for this interest-only loan.
3.70%
4.13%
$0
$395 p.a.
90%
Package your loan with an eligible credit card for discounts on rates and fees, and get a 100% offset account.
3.73%
3.73%
$0
$0 p.a.
80%
Get a 100% offset account and pay no application or ongoing fees on this special variable rate for owner-occupiers.
3.97%
4.02%
$445
$0 p.a.
90%
Buy a home with just a 10% deposit with this variable rate loan. Face-to-face consultations available for NSW and ACT customers.
3.69%
4.11%
$0
$395 p.a.
80%
Save on interest with a 100% offset account and save on other ME products with this package loan.
4.09%
4.49%
$0
$395 p.a.
90%
Enjoy all the benefits of a full-featured package investment loan, including a 100% offset account.
4.09%
4.11%
$0
$0 p.a.
80%
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
3.74%
4.57%
$445
$0 p.a.
90%
A two year discounted rate which reverts to an ongoing life of loan discount afterwards. Face-to-face consultations available for NSW and ACT customers.
4.57%
4.94%
$0
$395 p.a.
95%
No application fee and 100% offset account.
3.79%
3.80%
$0
$0 p.a.
70%
Keep your LVR at 70% or below and enjoy a special discounted rate. Also, pay no application or ongoing fees.

Compare up to 4 providers

How to avoid being ripped off

The best way to avoid being ripped off with a fixed home loan is by comparing home loans before your fixed term ends and renegotiate with your lender or switch to a better deal. If you fixed your loan at the fixed rate of 5.07% and switched after three years to one of the lowest variable rates available you could save a considerable amount on your monthly repayments. For example, if you switched to a variable home loan with a rate of 4.59%, you could save $168 in monthly repayments compared to the average revert rate of 5.51%. Over the remaining loan term that’s a saving of over $54,000.


Marc Terrano

Marc Terrano is a content marketer manager at finder. He's been writing and publishing personal finance content for over five years and loves to help Australians get a better deal.

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comp rate of 3.66%p.a.

Tic:Toc Live in Loan Variable Rate - Principal & Interest

Go from application to approval in as little as 20 minutes with a variable rate loan from this innovative online lender. Add a 100% offset account for $10 a month.

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Start your home buying journey with 2 years of fixed repayments and a reasonable rate from a big 4 bank. Available with a 10% deposit.

UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupied Variable P&I Rate — borrowing $700,000 or more

Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).

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