Compare 1-year fixed rate home loans

How does fixing a home loan for 1 year work?

With a fixed rate home loan, your rate doesn't change during the fixed period. After the fixed period ends, the loan reverts to a variable rate loan. With a variable interest rate, your lender can change your interest rate at any time.

Most Australian lenders let borrowers fix their rate for a period between 1 and 5 years.

If you want to fix your rate for a longer period, check out our guides on:

• 2-year fixed rate loans
• 3-year fixed rate loans
• 4-year fixed rate loans
• 5-year fixed rate loans

Why get a 1-year fixed rate home loan?

• Repayment certainty. When you fix your rate you know exactly what your repayments are each month. This means you can budget for your exact repayments.
• Forget about rate rises. Sometimes interest rates rise rapidly. This hits borrowers on variable rate loans immediately. By fixing, you might be on a higher rate. But you don't have to worry about a sudden jump in repayments.
• Easier to break. One of the downsides to fixing is it's expensive if you need to exit the home loan during the fixed period. You pay a fee called a break cost if you refinance or end the mortgage before the fixed period ends. Because a 1-year fixed period is quite short, you're locked in for less time and the break fee will be lower.

Are 1-year fixed rate loans higher than variable rate loans?

Most of the time, a fixed rate loan is going to be higher than a variable rate loan - but not necessarily at the moment.

When interest rates were at record lows back in 2020 and 2021, some of the lowest interest rates on the market were 1- and 2-year fixed rate loans. Fixed rates then rose higher than variable rates as the cash rate increased in 2022 and 2023.

But now after the RBA cut the cash rate 3 times in 2025, variable rates have been falling too. This means we can expect to see variable rate loans get more competitive.

The average 1 year fixed owner occupier home loan interest rate in December 2025 is 5.69%. The lowest is 4.84%.

The average owner occupier variable home loan interest rate in December 2025 is 6.46%. The lowest is 4.99%.

How do I compare 1-year fixed rates?

Comparing 1-year fixed rate home loans is no different than comparing another mortgage type.

Focus on the following:

A lower rate is always better

Even if you're not fixing entirely to get the lowest rate, when comparing 1-year fixed rates you should look for a lower rate among those products. It means your repayments will be lower.

Look for a loan with low fees

Some loans have an application fee, a settlement fee or even a monthly account fee. Some loans have almost no fees.

Obviously the less you have to pay in fees, the better.

Loan features

Fixed rate loans are often less flexible than variable loans. They are less likely to have offset accounts or let you make extra repayments. But some do, so it's worth comparing.

But even if a 1-year fixed rate lacks these features, you'll be on a variable rate in 12 months. Then the loan will likely give you more repayment options.

Can any borrower fix for 1 year?

Most lenders offer both fixed and variable rate loans across most of their product range. Owner-occupiers and investors both have plenty of options if they want to lock in a fixed rate.

While it is true that there are more options out there for variable rate borrowers, it's still possible to find more unique fixed rate products like:

• Fixed rate package home loans
• Fixed rate interest-only investor loans
• Low deposit fixed rate home loans
• Bad credit fixed rate home loans

More questions about fixing your home loan rate for 1 year

• Is now a good time to fix?

  If your only concern is getting the lowest rate possible, a variable rate loan could look more competitive in the short term.

  This is because the RBA started lowering the cash rate in February 2025, causing lenders to lower their variable rate home loans.

  The latest ABS statistics show that only 2.59% of home loans are fixed at all. In mid-2021 when interest rates were at record lows, that figure reached 46.02%.

• How do I know when interest rates are going to rise?

  It's hard for the average person to understand interest rate moves. Lenders and banks are largely free to set their own rates on home loans, but they are guided by the broader economy and how easy (and cheap) it is for them to borrow the money to fund home loans.

  The RBA also plays a big role. The bank sets the official cash rate, which sets a benchmark for the cost of institutions to lend and borrow money. When the cash rate goes up, lenders raise variable interest rates for borrowers. But they also start to raise fixed rate loans for new customers.

  Follow Finder's monthly cash rate predictions to find out where the experts think rates are heading.

• What's a split rate home loan?

  A split rate loan allows you to divide your loan into fixed and variable rate portions. This means you can lock in, say, 40% of your loan for 1 year and have the remaining 60% on a variable rate.

  A split rate lets you have the best of both worlds and is a way of hedging your bets if you're concerned about rate rises but still want the extra features and repayment options on a variable rate loan.

How we calculate Home Loan Finder Scores

Read full methodology

What different scores mean

9+

Excellent

These home loans offer low costs, coupled with a host of features, giving the best overall value.

7+

Great

These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.

5+

Standard

Usually the home loans would offer above average rates. They may still include some competitive features.

0+

Basic

Higher costs and/or fewer features.

What is Finder Score?

The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.

To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.

Read the full breakdown

To make sure you get accurate and helpful information, this guide has been edited by Jason Loewenthal as part of our fact-checking process.

Written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 686 Finder guides across topics including:

• Home loans
• Credit cards
• Personal finance
• Money-saving tips