Home loan check-in: Are fixed rates on their way back up?

Two people discussing home loan rates.

Ultra-cheap fixed rates have fuelled a rush to the property market and sent home values soaring, but a number of banks have begun increasing long-term fixed offerings, suggesting a market slowdown might be just around the corner. 

With the RBA’s term funding facility due to end in the second half of the year, longer term fixed rates will likely drift upwards, meaning the current interest rate environment might look a lot different in just a few months’ time.

So far, the Commonwealth Bank has been the only major bank to reverse course. It lifted 4-year rates for its Fixed Rate Wealth Package by 20 basis points to 2.19% p.a. (3.73% p.a. comparison rate*), citing increased funding costs.

Bank of Queensland also raised 4- and 5-year rates by 20 basis points at the same time it cut its 2-year offering. 4-year rates now sit at 2.29% p.a. (3.00% p.a. comparison rate*).

Meanwhile, Teachers Mutual Bank increased 4-year rates by 19 basis points and 5-year rates by 34 basis points across its associated brands. More banks and lenders are expected to follow.

Typically, only around 15% of mortgages are fixed, but the combination of rock-bottom rates and predictable payments have attracted plenty of borrowers in the past year, Right now, fixed rates account for more than one-third of new mortgages.

At the time of writing, the lowest fixed rate offers among lenders we track are: 

TermHome loanRate
1-yearGreater Bank Discount Great Rate Home Loan1.69% p.a. (3.49% p.a. comparison rate*)
2-yearHomestar Star Classic Fixed Special Home Loan1.74% p.a. (2.23% p.a. comparison rate*)
3-yearUBank UHomeLoan1.75% p.a. (2.22% p.a. comparison rate*)
4-yearQBANK Fixed Rate Special1.97% p.a. (3.26% p.a. comparison rate*)
5-yearGreater Bank Discount Great Rate Home Loan2.19% p.a. (3.10% p.a. comparison rate*)

Earlier this week, the Reserve Bank confirmed it would keep three-year government bond yields at 0.1%, meaning short-term fixed rates will remain locked in for the foreseeable future.

But those looking to fix their loan for a longer period of time might have only a small window to take advantage of the best deals.

While many might be eager to jump right in, Mozo spokesperson Tom Godfrey advises paying attention to the revert rate, which is the rate your loan rolls over to unless you negotiate an alternative with your lender. 

“While fixing your rate can give you some peace of mind, now is the time to prepare yourself for making higher repayments when the fixed period ends,” he said. 

Mozo found that the average Big 4 customer with a 5-year fixed rate can expect their revert rate to be around 116 basis points higher. That would see their monthly repayments jump up from $1,568 to $1,792.

If you’re in the market for a home loan, visit our fixed rates comparison page to get an idea of what’s currently available, or browse the selection below.

Home loan comparisons on Mozo - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.
    fixed 3 years
    2.13% p.a.
    Go to site
    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.32% p.a.
    Go to site
    Details
  • placeholder
    Special Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    3.67% p.a.
    Go to site
    Details
  • placeholder
    Fixed Rate Home Loan

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.87% p.a.
    Go to site
    Details
  • placeholder
    Well Balanced Fixed

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    1.95% p.a.
    fixed 2 years
    2.02% p.a.
    Go to site
    Details

* 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.

^See information about the Mozo Experts Choice Home Loan Awards

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.