Fixed home loan rates are at all-time lows, is now the time to lock in a rate?

Couple moving into new home.

Efforts by the Reserve Bank of Australia have made the cost of borrowing cheaper than ever, and record low fixed rates have seen a growing number of buyers rushing to lock in all or part of their loan.

Lenders are certainly eager to attract quality borrowers. Online lender UBank, a division of NAB, recently announced a 3-year fixed rate of 1.75% p.a. (2.22% p.a. comparison rate*), which is available until 26 February 2021.

The offer is currently the lowest standard fixed rate among lenders we track, and a full 62 basis points below the 3-year fixed rate average of 2.37% p.a.

Even among the big banks, fixed rates below the 2.00% mark are no longer a rarity, with CommBank, NAB and Westpac offering customers between 1.98% p.a. (3.69% p.a. comparison rate*) and 1.99% p.a. (3.66% p.a. comparison rate*) on 4-year terms.

But is now the best time to lock in your home loan? Mozo’s banking expert Peter Marshall says decisions by the RBA in the coming months could bring rates down even further, although pinpointing the bottom of the cycle can be tricky. 

“One option for the RBA is to continue to support low rates by extending its bond purchase program, and it could even start to target longer term rates, which some commentators have said could start in April,” he said.

“But if the RBA decides to ease back on its bond purchasing activity there should still be some time to pick up a good fixed rate before they start to increase again.”

If current interest rate settings have rekindled your property ownership dreams, check out the excellent deals below. And if you’d like a more in-depth look at what’s on the market, visit our home loans comparison page.

  • 1.75% p.a. 3-year fixed rate (2.22% p.a. comparison rate*)
  • Free extra repayments up to $20,000 p.a.
  • 2020 Mozo Experts Choice Award winner^

This fixed offer from online lender UBank comes with rates as low as 1.75% p.a. (2.22% p.a. comparison rate*) on 3-year terms, available to borrowers who apply by 26 February 2021 and have their application settled within 90 days. You’ll be able to borrow between $100,000 and $2,000,000, make extra repayments up to $20,000 each year, and split your loan if you want to receive some of the benefits that come with a variable rate.

  • 2.09% p.a. 3-year fixed rate (2.43% p.a. comparison rate*)
  • Free extra repayments and redraw facility
  • No upfront or ongoing fees

The Macquarie Basic Home loan offers competitive fixed rates on a range of terms, along with a number of features to help make servicing your loan as smooth as possible. You'll be able to make free extra repayments, access a redraw facility, and split your loan if you wish. You can also opt in to the Qantas Frequent Flyer program for an extra 0.05% on your interest rate. This will give you 10,000 points per $100,000 borrowed, 1,000 points every month for balances over $150,000 and 25,000 points on the 3rd and 5th anniversaries of your home loan.

  • 1.99% p.a. 3-year fixed rate (2.70% p.a. comparison rate*)
  • Free extra repayments (up to $10,000 per year)
  • No annual fee

With loans.com.au’s fixed home loan you can take advantage of rates as low as 1.99% p.a. (2.70% p.a. comparison rate*) on 3-year terms. Loan amounts range from $50,000 to $1,000,000, repayments can be made weekly, fortnightly or monthly, and extra repayments are free up to $10,000 a year. There are, however, some upfront costs you’ll need to budget for, namely the $220 valuation fee and the $300 settlement fee.

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

**Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.