Is 2022 your last chance to lock in a low fixed home loan rate?

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After reaching some of the lowest points recorded in years during 2021, interest rates on fixed home loans have started rising across the board.

Longer term fixed rates (4 and 5-year terms) have been ticking up for a while, but in the last few months of 2021 lenders have also started increasing their shorter fixed rates (1, 2 and 3-year terms).

“We had some amazingly low fixed rates last year, but those rates have largely gone now,” says Mozo Banking Expert, Peter Marshall.

“Now that the Reserve Bank’s Term Funding Facility has ended and with the expectation that the official cash rate will start to head north in the next few years, leaders will likely continue to increase their fixed rates - particularly their longer 3, 4 and 5-year rates.”

So given that fixed rates are unlikely to revert to last year's lows, is it still worth locking in a rate, or has the opportunity passed?

“When it comes to interest rates, it’s all relative,” says Marshall. “People looking for rock bottom rates have likely missed out, however, in a couple of years time the fixed rates on offer right now might actually look like a pretty good deal.”

“It’s up to each borrower to do their own risk assessment, and ultimately it will come down to their own situation, but it could be the case down the track that somebody looks back on the rates being offered right now and wishes they had locked in for five years when the opportunity was there.”

Average fixed home loan rates — Mozo database (2015 - 2022)

 

What does a competitive fixed rate look like at present?

As our graph above shows, fixed home loan rates available to owner occupiers are (on average) still relatively low - at least, compared to most of the period between 2015 to present during which we’ve been tracking them.

Those are just the averages though. There are plenty of lenders offering much sharper rates, including those below which currently have the lowest fixed rates being tracked in the Mozo database.

Lowest fixed rates — Mozo database (January 12, 2022)^^

TermLender and loanFixed rate
1-yearUBank - UHomeLoan1.79% p.a. (2.18% p.a. comparison rate*)
2-yearQudos Bank - Fixed Rate Home Loan1.89% p.a. (2.64% p.a. comparison rate*)
3-yearAustralian Mutual Bank - Fixed Rate Home Loan1.98% p.a. (2.54% p.a. comparison rate*)
4-yearBankVic - Fixed Rate Home Loan2.39% p.a. (3.63% p.a. comparison rate*)
5-yearBankVic - Fixed Rate Home Loan2.49% p.a. (3.59% p.a. comparison rate*)

Of course, the alternative for new borrowers or those looking to refinance is to consider a variable rate home loan. While variable rates can go up or down at any time, broadly speaking, variable rates are around the lowest point they’ve ever been at present.

RELATED: The best home loans in Australia for 2022

Thinking about locking in a rate on your home loan? Get acquainted with a range of rates and loans on offer from different banks and mortgage lenders by using Mozo’s handy fixed rate home loan comparison table.

^^Interest rates are based on an owner occupier making principal and interest repayments on a $400,000 loan with an 80% LVR. For more information on average mortgage rates, check out our dedicated Australian home loan statistics page.

Compare fixed rate home loans - last updated 25 January 2022

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • UHomeLoan
    interest rate
    comparison rate
    Initial monthly repayment
    1.79% p.a.
    fixed 1 year
    2.18% p.a.

    Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Details
  • Well Balanced Fixed
    interest rate
    comparison rate
    Initial monthly repayment
    2.27% p.a.
    fixed 2 years
    1.95% p.a.

    Super low fixed rate and only 20% deposit required. Optional 100% offset account. Free extra repayments and redraw facility. Flexible repayment schedule.

    Details
  • Own Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    2.34% p.a.
    fixed 2 years
    2.59% p.a.

    Competitive fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    Details
  • Special Fixed Rate Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    2.54% p.a.
    fixed 2 years
    3.78% p.a.

    Lock in a low fixed rate or choose to split your loan between fixed and variable. Insurance discounts and no fee credit card or zero fee personal loan available. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Limited time offer extended, T&Cs apply.

    Details
  • Mozo Expert Choice Badge
    Discount Fixed Rate
    interest rate
    comparison rate
    Initial monthly repayment
    2.59% p.a.
    fixed 2 years
    3.17% p.a.

    Lock in a competitive rate for 2 years. Only 20% deposit required. Flexible repayment options and make up to $5,000 in additional repayments annually. Refinance to BOQ by 31 January 2022 and get $3,000 cashback (T&Cs apply).

    Details
  • Fixed Home Loan
    interest rate
    comparison rate
    Initial monthly repayment
    2.87% p.a.
    fixed 3 years
    2.81% p.a.

    The IMB Fixed Rate Home Loan gives you peace of mind with the security of fixed loan repayments. You can also pay up to 12 months repayments in advance without penalty.

    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

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