Is 2022 your last chance to lock in a low fixed home loan rate?
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)^^
| Term | Lender and loan | Fixed rate |
| 1-year | UBank - UHomeLoan | 1.79% p.a. (2.18% p.a. comparison rate*) |
| 2-year | Qudos Bank - Fixed Rate Home Loan | 1.89% p.a. (2.64% p.a. comparison rate*) |
| 3-year | Australian Mutual Bank - Fixed Rate Home Loan | 1.98% p.a. (2.54% p.a. comparison rate*) |
| 4-year | BankVic - Fixed Rate Home Loan | 2.39% p.a. (3.63% p.a. comparison rate*) |
| 5-year | BankVic - Fixed Rate Home Loan | 2.49% 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.
Fixed home loan comparisons on Mozo
-
Fixed Home Loan
- Owner Occupier
- Principal & Interest
- LVR <95%
Go to site- Interest rate
-
5.69
%
p.a.
Fixed 3 years
- Comparison rate
-
6.28
%
p.a.
- Initial monthly repayment
-
$2,899
Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.
- interest rate
-
1 year - 6.19% p.a. (6.45% p.a.*)
2 years - 5.69% p.a. (6.34% p.a.*)
3 years - 5.69% p.a. (6.28% p.a.*)
4 years - 5.89% p.a. (6.30% p.a.*)
5 years - 5.89% p.a. (6.27% p.a.*)
- Fixed loan revert rate
-
6.34% p.a.
- Upfront fees
-
$799
- Ongoing fees
-
$6.00 monthly
- Discharge Fee
-
$350.00
- Package
-
-
- Maximum loan to value ratio
-
95.00%
- minimum borrowing amount
-
$10,000
- maximum borrowing amount
-
$5,000,000
- type of mortgage
-
Fixed
- Repayment types
-
Principal & Interest
- Availability
-
Owner Occupier
- Repayment options
-
$2,899
- Extra repayments
-
yes - free up to 1 year in advance
- Redraw facility
-
yes - free
- Minimum redraw amount
-
$500.00
- Offset account
-
no
- Split account
-
yes
- Other restrictions
-
Monthly fee only applies to fixed period of loan.
- Other benefits
-
-
- Special Offers
-
$4,000 cashback for loans $750,000 and above with a maximum LVR of 80%, settled within 90 days of application for refinancers or 180 for purchase loans. $3,000 for loans between $500k and $749k, $2,000 for loans between $250k and $499k.
Read reviews and learn more about IMB Bank home loans
Go to site -
Fixed Rate
- Owner Occupier
- Principal & Interest
- <80% LVR
- Interest rate
-
5.74
%
p.a.
Fixed 3 years
- Comparison rate
-
6.81
%
p.a.
- Initial monthly repayment
-
$2,915
Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
- interest rate
-
1 year - 6.14% p.a. (7.13% p.a.*)
2 years - 5.74% p.a. (6.94% p.a.*)
3 years - 5.74% p.a. (6.81% p.a.*)
4 years - 5.89% p.a. (6.75% p.a.*)
5 years - 5.99% p.a. (6.69% p.a.*)
- Fixed loan revert rate
-
7.24% p.a.
- Upfront fees
-
$160
- Ongoing fees
-
$0.00
- Discharge Fee
-
$160.00
- Package
-
-
- Maximum loan to value ratio
-
80.00%
- minimum borrowing amount
-
$20,000
- maximum borrowing amount
-
-
- type of mortgage
-
Fixed
- Repayment types
-
Principal & Interest
- Availability
-
Owner Occupier
- Repayment options
-
$2,915
- Extra repayments
-
yes - free up to to lesser of 5% of original fixed loan amount, or $5,000 each year
- Redraw facility
-
no
- Minimum redraw amount
-
-
- Offset account
-
Optional - $10 per month - 1 year fixed term only
- Split account
-
yes
- Other restrictions
-
-
- Other benefits
-
No monthly fee after end of fixed rate term. Lock your fixed rate for 90 days for a fee of $750 per $1m in lending (or part thereof).
- Special Offers
-
$3,000 cashback for eligible First Home Buyers borrowing $250k+, $2,000 cashback when you refinance loans of $250k+, <80% LVR, settle within 180 days for first home buyers, 120 days for refinances. Excludes refinances from ANZ, ANZ Plus and Suncorp.
Read reviews and learn more about ANZ home loans
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Your selected home loans
* 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. You can change the loan amount and term in the input boxes at the top of this table. 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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