Fixed rate home loans that allow extra repayments

Couple moving into new home.

Since the RBA confirmed that the cash rate could rise sooner than initially planned at its November meeting, many borrowers have turned their sights to fixed rates to protect their finances against rising rates.

Though increased funding costs had already caused long-term fixed rates to drift upwards, the average 4-year rate among lenders we track is still well below the average variable rate — 2.75% p.a. compared to 3.11% p.a. at the time of writing.

But unlike variable rate loans, fixed options are often limited in the features they offer. So if you’re looking for a fixed rate loan that allows you to make free and unlimited extra repayments, you might have your work cut out for you.

Thankfully, there are fixed options out there that aren’t too strict with their limits. We’ve compiled a few below to help those who want to get ahead on their mortgage while also benefiting from the certainty of a fixed rate.

Newcastle Permanent Special Fixed Rate Home Loan
  • Free extra repayments up to $25,000 p.a.
  • 2.59% p.a. (3.65% p.a. comparison rate*) on 4-year terms
  • Eligible refinancers can receive $2,000 cashback (terms and conditions apply)

The Special Fixed Rate Home Loan from Newcastle Permanent lets you make extra repayments of up to $25,000 per year, so it’s sure to be appreciated by those looking to pay down their loan ahead of schedule. An offset account is also available, so if you’ve got more money on hand but don’t want to put it towards your mortgage, you can still use it to save on interest.

What’s more, you can also receive $2,000 cashback when refinancing a loan of at least $250,000 (<80% LVR) from another bank or lender, so long as you apply by 17 December 2021 and are funded by 28 February 2022 (terms and conditions apply). Just keep in mind that this home loan comes with a $595 establishment fee, and break costs may apply if you exceed the allocated extra repayments amount.

Well Home Loans Well Balanced Fixed
  • Free extra repayments up to $20,000 p.a.
  • 2.79% p.a. (2.28% p.a. comparison rate*) on 4-year terms
  • Offset account available for $10 per month

The Fixed Rate Home Loan from Qudos Bank allows up to $10,000 in extra repayments per year, plus a redraw facility in case you feel some of those extra repayments would be better served back in your pocket. And for an extra $10 per month, you can make use of an offset account to help save on interest.

The interest rates available are also quite attractive, with rates on 4-year terms sitting at 2.79% p.a. (2.28% p.a. comparison rate*). There are, however, a few fees you’ll need to budget for, such as the $250 application fee, $385 legal fee, $150 settlement fee, and $300 discharge fee. Penalties will also apply if you make more extra repayments than allowed.

Tic:Toc Fixed Home Loan
  • Free extra repayments up to $20,000 p.a.
  • 2.59% p.a. (2.12% p.a. comparison rate*) on 4-year terms
  • Offset account available for $10 per month
Find out more

Backed by Bendigo Bank and Adelaide Bank, Tic:Toc is an online lender that launched in 2017. On this loan, borrowers will be able to make up to $20,000 in extra repayments each year, and the free redraw facility means you can access those funds if you need them later on. An offset account is also available, however this will cost an extra $10 per month. While this loan is fairly light on fees, there is a discharge fee of $325 and a service fee of around $60 for online settlement (or $80-$200 for paper settlement).

Qudos Bank Fixed Rate Home Loan
  • Free extra repayments up to $10,000 p.a.
  • 2.59% p.a. (2.73% p.a. comparison rate*) on 4-year terms
  • No upfront or ongoing fees

Those hoping to pay down their mortgage faster while also taking advantage of competitive rates might appreciate this offer from Qudos Bank. Rates sit at 2.59% p.a. (2.73% p.a. comparison rate*) on 4-year terms and you'll be able to pay up to $10,000 extra each year (paying more will incur a penalty). Unfortunately, you won’t have access to a redraw facility, meaning those extra repayments can’t be retrieved if you need them down the track. You'll also have to be mindful of the $275 discharge fee.

For a look at more options currently available, browse our fixed rate home loan comparison page.

* 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.

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