Fixed rate home loans
Fixed interest rate home loans are now as low as 2.09%. That's lower than variable rates!
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Fixed home loan interest rates have never been lower. In fact, they're even beating variable rates now. On this page you can compare competitive fixed rate home loan offers from lenders large and small.
Below the table you can read our detailed guide and decide if fixing is right for you. fixed rate comparison rate Apply for the Virgin Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I) and get a low interest rate with no application fee as well as a 100% offset account.Virgin Money Home Loan Offer
Virgin Money Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
2.29 %
p.a.
2.91 %
p.a.
Virgin Money Home Loan Offer
Compare fixed rate home loans
After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.
- A comparison of home loans from multiple lenders.
- Expert guidance through the entire application process.
- Free suburb and property reports.
The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)
What is a fixed home loan rate?
Australian home loans have two rate types: fixed and variable. The clue is in the name. Variable rates can rise and fall at the lender's discretion. Fixed rates don't change during an initial "fixed" period (usually between one and five years).
But there's a little bit more to it than that. Here are the quick facts on fixed home loan rates:
- Cost. A fixed interest rate is typically higher than a variable rate, though this depends on the loan and lender.
- Flexibility. A fixed rate mortgage is less flexible. You might not be able to make extra repayments and there may be higher costs for leaving the mortgage (to refinance). Always read the fine print on your mortgage contract.
- Features. If you're looking for an offset account with your loan then a variable rate might be a better option for you. Fixed rate loans with offset accounts are comparatively rare.
What happens when the fixed period on my interest rate ends?
You need to look at the revert rate. This is the variable interest rate that your fixed loan will switch to after the fixed period.
It might be higher than your current fixed rate, but it could be lower too. It depends on your lender, the product and the position of rates in the market at the time. If the revert rate is high, you should probably refinance your loan to a lower variable rate or ask your lender for a discount.
How do I compare fixed rate loans?
To find a good fixed rate product look at the following:
- A low interest rate. For any mortgage a lower rate will save you money. With fixed rates, borrowers typically hope that they can lock in a good rate now and be protected if rates rise. It's worth looking at variable rates and comparing the two.
- Low fees. Always pay attention to a loan's fees, especially annual or ongoing fees.
- Length. Fixed rate borrowers have to choose between one-, two-, three-, four- and five-year fixed rates. Most loans give you multiple options, with different rates for each. Shorter fixed periods are typically lower, so one-year fixed rates are more competitive than five-year fixed rates.
Should I fix?
Most Australians go for variable rate loans. They are more flexible products and tend to have lower interest rates.
But there are some good reasons to fix, especially right now when fixed rates have never been cheaper. Let's look at the pros and cons of fixing.
The benefits of fixing
The biggest advantage of a fixed rate is that your repayments won't change. This can offer you peace of mind and certainty around your repayments. You can budget accordingly and then forget all about rate changes until the fixed period ends.
And if variable interest rates rise, you might end up with a better rate than the average. But rate changes can be hard to predict.
The disadvantages of fixing
There are several reasons why fixed interest rates are less popular in Australia:
- Limited features. Fixed rate loans don't have a lot of flexibility compared to variable rate mortgages. Most lenders don't offer fixed home loans with 100% offset accounts.
- Break costs. If you decide to break out of a fixed rate loan before the end of the specified term, you may face a break cost. This can cost a few hundred dollars or potentially thousands. Read this guide to learn more about breaking a fixed rate loan.
- Rates could drop. If the RBA slashes the cash rate you could end up with a higher rate compared to variable home loans.
Are fixed rates cheaper?
The key thing to understand is that a fixed rate loan is about balancing a good rate with certainty about your repayments. If you're happy with the rate and don't think you'll need to refinance soon then fixing is not a bad idea at all. Just accept that if variable rates drop you may have to wait a while to refinance and take advantage of a lower rate.
If you fix your rate and then variable rates drop you'll end up worse off. But there are times when fixed rates go lower than variable ones. Look at the graph below.
In the later half of 2019 the most competitive fixed rates were actually equal to their variable counterparts. Now they're actually getting cheaper. While this is a rare occurrence it does happen.
Fixed versus variable rates: what are the differences?
Can fixing be cheaper even after paying break costs?
Breaking a fixed rate loan to refinance to a lower rate can be expensive. But if your repayments get significantly lower then you could still end up saving money in the long run.
Let's look at a quick example. Say you have a 3-year fixed rate loan with one year left on the fixed period. You fixed your rate at 3.90% and you have $400,000 remaining on your loan. The loan term is 30 years. Because fixed rates are lower now, your lender is offering a fixed rate of 3.30% for new borrowers.
You can use this lower rate to get a rough estimate of your breaking costs. The difference in your original fixed rate versus the current offer of 3.30 can stand in for the more complicated difference in funding costs. The basic break fee calculation is:
- Loan amount ($400,000) x fixed period remaining (1 year) x rate difference % (0.60%) = $2,400
Keep in mind that this is an estimate only, and every lender has their own way of calculating break costs.
So that's your breaking cost. Now consider the savings if you switched to a much lower rate from another lender, such as 2.19%. You'd easily save money even when paying the $2,400 because your repayments would be lower.
| Old loan | New loan | |
|---|---|---|
| Loan amount | $400,000 | $400,000 |
| Interest rate | 3.90% | 2.19% |
| Monthly repayment | $1,886 | $1,516 |
| Yearly saving | N/A | $4,440 |
| Break cost | $2,400 | $0 |
| Saving minus break cost | N/A | $2,040 |
In the first year after switching you'd save around $2,000 even after paying the break cost. And you'd save even more in the years after this.
The split rate alternative
If you're unsure about going with a fixed or variable rate many lenders allow you to split your loan into fixed and variable portions. This essentially lets you hedge your bets. Calculating the best split option for you can be complicated, your lender or a mortgage broker can help you do this.
Read more on this topic
-
NAB cuts rates for home buyers, beating out its Big Four rivals With owner-occupier rates falling to 2.19%, NAB is now the most competitive of the Big Four banks.
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Hume Bank Fixed Home Loan - 2 Year Rate A review of the Hume Bank Fixed - 2 Year Rate. Learn more about this product.
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How to cut $5,000 in home loan interest in one year The ACCC is urging consumers not to settle for the advertised headline variable rate when considering a new home loan.
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Reduce Rate Slasher Variable Home Loan A review of the Reduce Rate Slasher Variable Home Loan. This loan has a 100% offset account.
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Buying and selling property during coronavirus Your guide to property transactions during the coronavirus pandemic.
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Fixed rate home loans are now the lowest rates on the market The coronavirus, financial forecasts and RBA decisions have made fixed mortgage rates incredibly competitive. For now.
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Coronavirus and home loan refinancing The coronavirus pandemic is a good time to look at refinancing your mortgage to recession-proof your finances.
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Rental relief and coronavirus: Support for Australian tenants who can't pay rent A guide to renter support during coronavirus, include government policies, welfare payments and more information for tenants who can't pay rent.
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Coronavirus mortgage relief and repayment help A run-down of the coronavirus support packages offered by Australian lenders and other ways you can get help.
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Every lender passing on the RBA's surprise second March 2020 rate cut Check if your lender is passing on the cut and offering you a lower variable mortgage rate (and if they're not, here's what you should do).
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Ask an Expert
Are there any banks that will loan to a single mother receiving parenting payment and Family tax benefits A & B as well as weekly child support. I also have 2 thirds of the total value of the property as a deposit so for me it is more financially viable than to continue renting?
Hi Lauren,
Thanks for your inquiry. There are home loan options for single moms like you on this page. You will find brands that accept applications from single parents receiving benefits.
Most lenders will only accept certain types of Centrelink payments and may not take the whole amount of your payment. As a friendly reminder, carefully review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.
Regarding renting, this will ultimately depend on how your monthly income goes and how long you can afford to pay rent.
A mortgage broker is the best person to reach out to see your options for home loans. They can give you a multitude of options according to your situation. In the meantime, to give you an idea of how your monthly repayments will go, you may use the calculator we have on this page.
Hope this helps and reach out to us again for further assistance.
Best,
Nikki
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