⚡️⚡️⚡️
With energy prices rising, switch to a cheaper plan
💡
Compare Prices Now
⚡️⚡️⚡️

Home loan interest rate lock

A rate lock means you get the interest rate you applied for even if the lender raises it after you submit the application.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Imagine comparing home loans and finally finding the perfect loan with a great interest rate. You fill out your application and submit it. But while you're waiting for settlement to take place, the lender lifts rates on its home loans. By the time you get the keys to your place, your home loan has a higher rate. That's where a rate lock comes in handy.

How does a home loan rate lock work?

When you buy a property you need to get your home loan application sorted quickly. But there will be a delay between your loan approval and the actual settlement day, when you take possession of your home and start repaying your loan.

During this time, your lender could increase interest rates on its loans. If you pay a small fee you get a rate lock. This means you get the rate you applied for even if it jumps up during settlement.

Lenders offer rate locks on fixed rate loans, not variable rate loans. It's not always available, so check before you apply for a loan.

Example: Susan opts for a rate lock

Susan has been looking for her dream house for quite some time and finally has found one that suits her and her young family. She takes out a $450,000 loan over 30 years.

She has applied for a fixed home loan with a rate of 2.50% for three years. This means Susan can budget for her repayments accurately for 3 whole years. Settlement is 60 days, and Susan is worried that interest rates will rise soon. So she opts for a rate lock, with a $100 fee.

Some time after submitting the application, the rate for her loan rises to 2.75%. Because of her rate lock she has avoided a rate hike of 0.25%. In dollar terms this is a big saving. Susan's monthly repayments at 2.50% are $1,778. At 2.75% she would be stuck paying $1,837 a month. Over 3 years, that $400 rate lock fee has saved her $2,124 in interest charges.

Risks and benefits of locking in your rate

Pros

  • No surprises. You can apply for a fixed rate home loan and not worry about rates rising before your loan is approved.
  • If rates drop you can still benefit. If during the rate lock period rates drop, many lenders will still allow you to benefit from the lower rates. As always, check the terms and conditions.

Cons

  • Rate lock fees. Rate locks can cost between $300 to $750 and in some cases even more. This is a lot of money to pay, especially if rates don't rise during settlement.

More questions about rate locks

Get a fixed rate home loan

1 - 17 of 17
$
years
Name Product Comparison Rate Fees Monthly Payment

Ubank Own Home Loan Fixed
Principal & interestOwner-occupier 1Y Fixed20% min. deposit
Principal & interestOwner-occupier 1Y Fixed20% min. deposit
Interest Rate
3.74%
3.24%
  • Application: $0
  • Ongoing: $250 p.a.
$695
Fix to this very competitive rate for one year. This loan requires a 20% deposit. This loan reverts to a variable rate once the fixed period ends, based on your LVR.

Well Money Balanced Fixed Home Loan
Principal & interestOwner-occupier 1Y Fixed10% min. deposit
Principal & interestOwner-occupier 1Y Fixed10% min. deposit
Interest Rate
4.64%
2.81%
  • Application: $250
  • Ongoing: $0 p.a.
$774
Owner occupiers can get a sharp fixed rate for the first year, plus an offset account. Available with a 10% deposit.

IMB Fixed Rate Home Loan
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Interest Rate
4.29%
3.66%
  • Application: $449
  • Ongoing: $6 per month
$743
A 2 years fixed with the competitive features.

Newcastle Permanent Building Society Premium Plus Package Fixed Rate
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Interest Rate
5.09%
4.83%
  • Application: $0
  • Ongoing: $395 p.a.
$815
Lock in your rate for 2 years and get package benefits. Requires a 20% deposit.

Macquarie Bank Basic Fixed Home Loan
Principal & interestOwner-occupier 3Y Fixed30% min. deposit
Principal & interestOwner-occupier 3Y Fixed30% min. deposit
Interest Rate
6.05%
3.65%
  • Application: $0
  • Ongoing: $0 p.a.
$906
Get a variable rate mortgage with flexible, basic features. $0 application fee and $0 ongoing fees. Requires a 30% deposit. Apply online and get fast approval.

G&C Mutual Bank Fixed Rate Home Loan
Principal & interestOwner-occupier 1Y Fixed5% min. deposit
Principal & interestOwner-occupier 1Y Fixed5% min. deposit
Interest Rate
4.39%
4.45%
  • Application: $500
  • Ongoing: $0 p.a.
$752
Lock in a sharp rate for the first year. Available with a 5% deposit.

Well Money Balanced Fixed Home Loan
Principal & interestOwner-occupier 2Y Fixed10% min. deposit
Principal & interestOwner-occupier 2Y Fixed10% min. deposit
Interest Rate
5.34%
3.11%
  • Application: $250
  • Ongoing: $0 p.a.
$838
A low fixed mortgage with an optional 100% offset account. Not available for construction purposes.

Ubank Own Home Loan Fixed
Principal & interestOwner-occupier 5Y Fixed20% min. deposit
Principal & interestOwner-occupier 5Y Fixed20% min. deposit
Interest Rate
5.19%
4.10%
  • Application: $0
  • Ongoing: $250 p.a.
$824
Get a low fixed rate for the first five years of your loan. Redraw facilities available. Requires a 20% deposit. This loan reverts to a variable rate once the fixed period ends, based on your LVR.

Macquarie Bank Basic Fixed Home Loan
Principal & interestOwner-occupier 3Y Fixed20% min. deposit
Principal & interestOwner-occupier 3Y Fixed20% min. deposit
Interest Rate
6.09%
3.70%
  • Application: $0
  • Ongoing: $0 p.a.
$909
Basic fixed rate home loan. Fast online application. $0 application fee and $0 ongoing fees.

Macquarie Bank Basic Fixed Home Loan
Principal & interestInvestment 3Y Fixed30% min. deposit
Principal & interestInvestment 3Y Fixed30% min. deposit
Interest Rate
6.25%
3.86%
  • Application: $0
  • Ongoing: $0 p.a.
$925
A principal and interest loan for property investors with a 30% deposit.

Macquarie Bank Basic Fixed Home Loan
Principal & interestInvestment 3Y Fixed20% min. deposit
Principal & interestInvestment 3Y Fixed20% min. deposit
Interest Rate
6.35%
3.96%
  • Application: $0
  • Ongoing: $0 p.a.
$935
Investors can be confident in their budgeting by locking in this 3 years fixed rate.

Ubank Own Home Loan Fixed
Principal & interestOwner-occupier 3Y Fixed20% min. deposit
Principal & interestOwner-occupier 3Y Fixed20% min. deposit
Interest Rate
4.99%
3.71%
  • Application: $0
  • Ongoing: $250 p.a.
$806
A competitive fixed rate loan from an online-only smart bank. Requires a 20% deposit. This loan reverts to a variable rate once the fixed period ends, based on your LVR.

Well Money Balanced Fixed Home Loan
Principal & interestOwner-occupier 3Y Fixed10% min. deposit
Principal & interestOwner-occupier 3Y Fixed10% min. deposit
Interest Rate
5.79%
3.45%
  • Application: $250
  • Ongoing: $0 p.a.
$881
A low 3 year fixed rate for home buyers. Add a 100% offset account with a $10 monthly fee. Not available for construction purposes.

Well Money Balanced Fixed Home Loan
Principal & interestInvestment 2Y Fixed10% min. deposit
Principal & interestInvestment 2Y Fixed10% min. deposit
Interest Rate
5.54%
3.41%
  • Application: $250
  • Ongoing: $0 p.a.
$857
A 2 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee. Not available for construction purposes.

Newcastle Permanent Building Society Fixed Rate Home Loan
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Interest Rate
5.19%
5.08%
  • Application: $0
  • Ongoing: $0 p.a.
$824
Owner-occupiers can lock in this rate for 2 years with no ongoing fees.

Well Money Balanced Fixed Home Loan
Principal & interestInvestment 3Y Fixed10% min. deposit
Principal & interestInvestment 3Y Fixed10% min. deposit
Interest Rate
5.99%
3.75%
  • Application: $250
  • Ongoing: $0 p.a.
$900
A competitive 3 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee. Not available for construction purposes.

Ubank Own Home Loan Fixed
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Principal & interestOwner-occupier 2Y Fixed20% min. deposit
Interest Rate
4.60%
3.47%
  • Application: $0
  • Ongoing: $250 p.a.
$770
Get a low fixed rate for the first two years of your loan. Split and redraw facilities available. Requires a 20% deposit. This loan reverts to a variable rate once the fixed period ends, based on your LVR.
loading

Compare up to 4 providers

More guides on Finder

Home Loan Offers

Important Information*

Find the right home loan now

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    PeterFebruary 20, 2018

    Do I need to pay rate lock if it goes over 90 days and I am unable to settle the property?

    • Avatarfinder Customer Care
      MayMarch 12, 2018Staff

      Hi Peter,

      Thanks for your question.

      Locking your home loan interest rate usually comes with a fee. So if you’ve applied for it, yes, you still have to pay the fee even when you’re unable to settle your loan/it goes over 90 days. Contacting your lender directly is also best so they may be able to advise as to how much and when would the fee be charged.

      Cheers,
      May

Go to site