Remove the uncertainty of rate rises with a fixed-rate home loan
Compare the latest fixed rate home loans below
Rates last updated September 27th, 2016.
Jodie
Compare the latest fixed rate home loans below
Rates last updated September 27th, 2016.
Jodie
Compare the latest fixed rate home loans below
Rates last updated September 27th, 2016.
Jodie
Compare the latest fixed rate home loans below
Rates last updated September 27th, 2016.
Jodie
Compare the latest fixed rate home loans below
Rates last updated September 27th, 2016.
Jodie
Aussie’s Mortgage Brokers can save you time and effort by helping you research, organise and apply for your home loan, at no cost to you. They compare hundreds of home loans to help find the right deal for you. Fill out the form on the left and an Aussie Mortgage Broker will meet you at a time of your choosing to discuss your needs and help you find the right loan.
How do I find the lowest fixed rate on finder.com.au?
In the table above, you can sort the interest rates in ascending order by clicking on the sorter buttons. This will order the products from lowest to highest so you can see which one offers the lowest interest on our site.
How does a fixed rate benefit me?
A fixed rate home loan benefits those who want to budget with confidence and don’t want their repayments rising due to higher interest rates. A fixed rate home loan is ideal for borrowers who want to budget with certainty, first-home buyers who are adapting to the routine of making regular repayments, and investors who want to ensure that their cash flow isn't affected by rising interest rates.
If you fix your rate at the bottom of the market, you can reap the benefit of a secure and competitive rate when the rest of the market bears the risk of higher interest rates.
In an economic climate of low interest rates, opting for a fixed interest rate could help you pay off your home loan faster. By making the same periodic repayments, you'll generally repay the principal down quicker than you would with a variable rate loan.
Back to topPhoebe locks in her rate
Phoebe and her husband have decided to purchase a property in West Pennant Hills, NSW. After speaking with a local mortgage broker, Phoebe learns that she needs to borrow $790,000 to complete the purchase.
After comparing different home loans recommended by her broker, Phoebe is torn about whether they should opt for a fixed rate or a variable rate mortgage. Phoebe knows that she and her husband anticipate to have children in the near future and as a result she is concerned about how they would manage their repayments if interest rates rose.
While she is drawn to the competitive features offered with a variable rate loan, such as a 100% offset account and the ability to make additional repayments without penalty, Phoebe believes that the certainty and security of a fixed rate loan will better suit their lifestyle.
She decides to lock in a competitive rate of 4.57% over a 5 year term.
How does a fixed home loan work?
You can choose a fixed rate term of up to 15 years, but most Australians choose between one, three and five year fixed terms.
When you apply for a fixed rate home loan, your lender will typically offer you something called a rate lock. There's a chance that interest rates will change between the time you apply and when you settle so a rate lock ensures that the rate you applied for stays with you through that process, which is usually about a month.
Unlike a variable rate home loan, additional repayments are either not allowed or limited to a certain amount each year. This is because your lender has secured your home loan from funding sources at a fixed rate as well, and paying your loan off early could result in financial loss for your lender.
Additional repayments has another effect on fixed rate loans, which doesn't apply to variable rate loans — early repayment fees. Paying off a fixed rate home loan during the fixed term usually comes with early repayment fees, also known as break costs. Break costs are determined using the amount of time you still have left in your term, the amount you borrowed, and the interest rate you locked in compared to what your lender secured funds for.
Fixed rate home loans also usually don’t offer features such as 100% offset accounts, although some fixed home loans will offer a partial offset account. Otherwise, a fixed rate home loan works in the same way as a variable home loan: you make your repayments each week, fortnight or month.
Back to topWhat are the pros and cons of a fixed rate mortgage?
A range of benefits and drawbacks are associated with a fixed rate home loan which are discussed below.
Pros
- Repayment certainty. One of the benefits of opting for a fixed-rate home loan is that it offers you the peace of mind in knowing what your periodic repayments will be. This allows you to budget more effectively as repayments remain the same until the fixed rate period ends.
- Security. With a fixed-rate home loan you are protected from interest rate rises as your interest rate is locked in for the specified term.
- Flexible loan terms. Fixed-rate mortgages are available from many Australian lenders with a variety of fixed loan terms available from one year through to 15 years.
Cons
- Limited features. You'll find that fixed rate loans don't have a lot of flexibility compared to variable rate mortgages. Typically, lenders won't let you make additional repayments on the fixed portion of your home loan, so you may incur a fee for depositing a work bonus or tax return into your home loan. Other restrictions may include not having access to a 100% redraw facility which is generally only offered with variable rate loans. While most lenders don’t offer fixed home loans with a 100% offset account, you can compare those lenders that do provide this feature with fixed rate mortgages here.
- Break costs. If you decide to break out of a fixed rate loan before the end of the specified term, you may face a significant break cost.
- Lower rates. If the RBA slashes the cash rate, you could end up with a higher rate compared to variable home loans on the market.
Are there any risks in taking out a fixed rate home loan?
The greatest risks associated with fixed rate home loans are lowering interest rates and costly break or refinancing fees.
Lowering interest rates
Remember that if you take out a fixed rate loan and the official cash rate falls, then you may be missing out on big savings. A good way to hedge this risk is to observe cash rate patterns and to see what the experts are saying. Fix your interest rate when you think rates will start to go up.
Expensive break fees
Should you decide to exit your loan for any reason before the fixed rate period is over, remember that you will liable for hefty exit fees that could outweigh any savings you have made.
Helpful article: How to avoid early repayment fees when repaying a home loan.
Less flexibility
Fixed rate home loans usually don't come with money-saving features such as an offset account, additional repayments and redraw facilities. These options are quite rare in the fixed rate home loan market.
Back to topFixed VS variable rate loan
Many homeowners face the dilemma of making the decision between a fixed and variable rate loan. While this depends on your personal situation, you need to carefully consider the benefits and risks of each rate type. For example, although a fixed rate offers you repayment and budget certainty, a variable rate also offers advantages such as the ability to benefit from interest rate falls which would lower your repayments.
Learn more about the benefits and drawbacks of fixed and variable rate loans.
Is a fixed rate the right option for me?
You may want to consider a fixed interest rate if you want the reassurance of knowing what your repayments will be over the loan period and the confidence to budget effectively to plan your finances. It may also be a good idea to lock in your rate if you’re concerned that interest rates will rise in the near future.
Before applying for a fixed rate loan, you should assess factors of your personal situation, such as:
- Current employment
- Current and expected future income
- Whether you plan to sell your property in the near future
- Family situation
When is it not a good idea to opt for a fixed rate?
As interest rates are unpredictable, you generally shouldn’t take out a fixed rate loan if you are simply trying to beat the market-- this should not form the basis of your decision. A fixed interest rate may not be a good idea if you:
- Plan to increase your loan
- Intend to sell your property
- Want to make additional repayments
- Want to refinance to a variable rate loan during the fixed term
- Want competitive and flexible features such as a 100% offset account and a redraw facility
Different fixed rate scenarios
Let's look at some different situations to see if a fixed rate home loan is suitable.
I'm planning to move houses soon, does a fixed rate home loan suit me?
It's best to avoid moving out until the fixed term has finished to avoid refinancing. Refinancing during the fixed rate period and will incur break costs.
One option is to opt for a fixed rate home loan that comes with a portability option that lets you transfer your existing loan to the new property.
I'm currently stuck with a fixed rate home loan that has a high interest rate. Can I refinance?
Unfortunately, refinancing during the fixed term period will incur a range of fees. However, if your current interest rate is very high, it may be worth refinancing to a lower interest rate.
Use our switching costs calculator to help you calculate whether refinancing your loan now will end up saving or costing you money. You can also find out what happens if you break a fixed rate loan contract.
Can I negotiate a fixed interest rate?
You can definitely negotiate your interest rate before you settle your home loan. However, it's not possible to negotiate your rate during the term.
Are there any other options available?
You may want to consider applying for a split rate option as this gives you the best (and worst) of both worlds. While you have some element of stability with your budget, you can also benefit from the flexibility of a variable rate. You can read more about split loans here.
Frequently asked questions
How much will I have to pay if I exit the loan early?
This will depend on a number of factors:
- How much time you still have left on your term
- The rate you locked in your loan for
- The rate your lender secured your funds for
For an accurate fee estimate, contact your lender and ask for a quote.
What’s the difference between a 100% offset account and a partial offset account?
A 100% offset account substitutes a part of the principal in your home loan by the full amount in your offset account, effectively reducing the amount of interest you pay. For example, an offset account with $50,000 on a home loan of $400,000 would see you pay interest on only $350,000. A partial offset account might only reduce the interest payable on your home loan by 5% or 10%. For example, a partial offset account in the example above might see you pay a slightly lower interest rate on $50,000 worth of your home loan.
What fixed terms are usually available in Australia?
The most common loan terms for fixed rates are between one and five years. The maximum fixed rate term available in Australia is 15 years, with 10-year and 7-year terms also available. Terms over five years are generally only offered by large banks and brands.
Can I make extra repayments on a fixed rate mortgage?
Many fixed rate home loans allow you to make additional repayments, but the amount is restricted per year or per term. Some lenders will allow you to make as much as $30,000 in extra repayments each year. Making extra repayments towards your home loan over the set limit will attract fees.
Can I switch between a fixed and variable rate loan?
Many lenders will allow you to switch between loan rates, although you might have to pay break fees if you're switching from a fixed rate, just as if you were leaving your lender for another. If you're switching from a variable rate home loan to a fixed rate with the same lender, you'll usually need to pay a renegotiation fee, which can cost between $200 and $400.
What happens once my fixed term ends?
This depends on your particular lender and loan type, but your lender will usually notify you that your loan term is going to end and give you the option to fix for another term or allow your loan to revert to a variable rate. Keep tabs on your fixed term and conduct your research before the fixed term ends.
Should I choose a fixed or variable rate home loan?
This depends on your lifestyle, future goals and appetite for risk. If your budget can't handle an increase in mortgage repayments in the short term, it may be a good idea to fix in a rate, but you should also take into account whether or not you will be selling your property during the fixed term. For more information about which rate to choose, read our guide.
Are exit fees banned on fixed rate loans?
Exit fees have only been banned on variable rate loans that were taken up after 1 July 2011. Exit fees may still be charged for fixed rate loans.
Does finder.com.au compare fixed rate personal loans?
Yes, we do. You can compare a range of fixed rate personal loans here.
Do you publish any historical interest rates?
We display a range of historical home loan interest rates on this page against the cash rate.
I am already in fixed plan for 3 years. 1 and a half years have passed can I change my plan or my bank?
Hi there,
thanks for the question.
Borrowers can leave a fixed rate home loan early, but doing so can come with expensive break fees. You can read more about them here.
I hope this helps,
Marc.
if buying a brand new home in Brisbane ,do I still have to pay stamp duty? and iam a first home buyer
Hi Waleed,
Thank you for contacting finder.com.au, a financial comparison website.
First home buyer schemes vary between each state and territory nationwide, please see our page on the scheme and the information for each state.
Stamp duty is also something that varies by state and territory country wide, please see our page on how to work out your stamp duty for further information.
To get the most accurate information it would be best to contact your local state revenue service.
Regards
Jodie
Just wanted to ask all the things that need to be considered when getting a home loan. The things I can think of are
Application fee
On going fees
Off set accounts
What other things are there.
Sharon
Hi Sharon,
thanks for the question, it’s great to see someone serious about home loan comparison.
I would also add to this list:
- Interest rate
- Comparison rate
- What type of interest rate you’d like e.g fixed, variable or split
- Can you make extra repayments on your loan (important if you fix in a rate)
- What level of customer service you need
We’ve written a detailed guide on all of these factors in our page here.
I hope this helps,
Marc.
I have a housing loan with Westpac bank and had to lock it in for 3 years. I have one year to go, can I break that agreement and go to a variable loan as the rates are much lower
Hi Lynda,
Thank you for getting in touch with finder.com.au.
You might be able to break from your fixed loan however there are fees involved in doing this before the fixed period is over, see more information on these here. Before making any decisions you should contact Westpac and see what these fees are charged for your particular loan.
Regards
Jodie
Currently I’m looking at fixed interest rate of 4.00% however I am wondering can banks beat it or let you have that interest rate to keep you at that bank your with?
Hi Giverny,
Thank you for your inquiry.
Each individual institution sets their own interest rates based on specific internal calculations and forecasts.You can compare different home loans by their interest rate by clicking on the ‘interest rate’ heading in our comparison tables.
In general, negotiation with banks over rates is definitely something that is possible, so when discussing loan possibilities with a lender always ask if they can offer a better rate.
Regards
Jodie
Is there a loan available to cover the difference between the price of a three bedroom house in the country and a 3 bedroom unit close to the Queen Elizabeth Hospital in or near woodville s.a.
Hi Joan,
thanks for the question.
You might want to read about and compare bridging home loans, or speak to a mortgage broker to find out more about what loans may suit your situation.
Cheers,
Marc.
Hi, We have 2 home loans and one is locked into a fixed interest rate of 8.09% until 2017. We want to change it but the breakout fee is really high. What options do we have?
Any help would be great thanks
Hi Rachel,
Thanks for your question.
Unfortunately since you have entered a binding contract, you’ll be liable to pay break costs. Please see this page for more information.
You may want to speak to a mortgage specialist about your options as they may be able to provide you with more information.
Cheers,
Shirley
Why does the 5.21% comparison rate for the Members Equity 3 year fixed rate vary so much from the 4.69% interest rate advertised? The fee structure does not differ much from the other loan providers?
Hi Damian,
Thanks for your question.
The comparison rate calculated on a loan of $150,000 for a term of 25 years repaid monthly. Please note that this comparison rate is only an indication and true only for the examples given and may not include all fees and charges.
Your personal loan terms may result in a different comparison rate.
Cheers,
Shirley
Hi There,
Great website!
I noticed that there is an advertisement for a 4.59%pa 2 year fixed rate loan with HSBC on your website yet it is not listed in your ‘Best Fixed Rate Loans’ Why is that?
I would also love to see this website allow you to list loans by maximum LVR over 90%, non-bank/bank loans, Home Loans with Offset etc.
Thanks.
Lewis
Hi Lewis,
Thanks for your comment.
For our review on the 2 year fixed HSBC home loan, please see this page. All products are subject to our disclaimer.
For loans with a LVR over 90%, please see this page.
Hope this helps,
Shirley