Time to lock in a fixed rate? Where to find home loans under 6%

By Jasmine Gearie · · 2 min read
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We’ve seen a slew of fixed rate cuts from major banks in the past two months, but does that mean now is a good time to lock in a low rate on your home loan?

It really depends on how soon the Reserve Bank of Australia (RBA) cuts the cash rate.

We first saw movements from the Big Four back in July, when NAB reduced its three-year fixed rate home loan down to 6.04% p.a.

Westpac and CBA followed suit one month later, with Westpac dropping its fixed rates as low as 5.89% p.a. CommBank similarly lowered its three-year fixed rate home loan to 5.89% p.a.

Should you lock in now, or wait for a rate cut?

Using the Mozo database, we’ve crunched some numbers and found that there’s a big opportunity to save money by locking in a fixed rate against current variable rate offers – but one rate cut could see you losing out.

Rate type
Average rate
Monthly repayments
Yearly repayments
Yearly saving vs variable
Average variable
6.77%
$3,462
$41,538
Average fixed 1 year
6.38%
$3,339
$40,068
$1,471
Average fixed 2 year
6.25%
$3,298
$39,574
$1,965
Average fixed 3 year
6.15%
$3,268
$39,212
$2,326

Source: mozo.com.au as at 18 September 2024, based on 80% LVR owner occupier home loan paying principal interest on a $500,000 loan.

The current average variable rate is 6.77%, but if you were to secure a two-year fixed rate at the current average of 6.25%, there’s the potential to save a massive $1,965 on your loan.

However, let’s say the RBA decides to cut the cash rate by 0.25% within the next 12 months, it’s possible that these savings could drop off.

We’ve applied a 0.25% cut to the current average rates in the table below to give you a clear example.

Rate type
Possible rate after 0.25% cut
Possible monthly repayments after 0.25% cut
Possible yearly repayments after 0.25% cut
Monthly saving vs variable
Average variable
6.52%
$3,382
$40,587
Average fixed 1 year
6.38%
$3,339
$40,064
$44
Average fixed 2 year
6.25%
$3,298
$39,580
$84
Average fixed 3 year
6.15%
$3,268
$39,210
$115

Source: mozo.com.au as at 18 September 2024, based on 80% LVR owner occupier home loan paying principal interest on a $500,000 loan.

It’s not clear cut

While the numbers suggest that once the RBA cuts the cash rate – and assuming lenders pass it on to consumers – the opportunity to save with a locked-in fixed rate diminishes, it doesn’t tell the whole story.

The figures above represent the average home loan rates in our database, and some of the best fixed rate home loans are currently below 6% – see the table below for some examples.

Economists at ANZ, NAB and Westpac are also predicting that interest rates will come down in the first quarter of 2025, with CommBank the only hold-out for a cut by the end of 2024.

So, should you lock in now? Mozo spokesperson, Rachel Wastell, says it’s important to weigh up what’s important to you.

“Fixed rates can offer borrowers a sense of security, especially at a time when the market is expecting the RBA to shift gears,” says Wastell.

“However, with the possibility of further rate cuts down the line, it’s crucial to weigh the benefits of locking in today’s rates against the flexibility and potential savings that could come with sticking to a variable rate.

“While locking in now can provide peace of mind, borrowers need to remember that over the next few years, if the RBA cuts rates a few times, variable rates might end up lower than what you’re paying on a fixed rate,” she says.

Compare the latest fixed rate home loans in the table below.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 16 November 2024 Important disclosures and comparison rate warning*

Fixed home loan comparisons on Mozo

  • Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.59 % p.a.
    Fixed 5 years
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $2,867

    Get repayment certainty with HSBC’s low 2 Year Fixed Rate Home Loan. Make up to $10,000 of extra repayments a year. The option to split your home loan between fixed and variable. Plus, score $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 28 February 2023 and settle by 30 April 2023.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    5.69 % p.a.
    Fixed 5 years
    Comparison rate
    5.97 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    5.69 % p.a.
    Fixed 4 years
    Comparison rate
    6.23 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Convenient offset account. No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $10,000,000.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    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.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    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.

  • 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.

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* 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.

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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.

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