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Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.
Read our Mozo Review to learn more about this South West Slopes Bank Optimum Fixed Rate Home Loan
Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
Read our Mozo Review to learn more about this ubank Flex Home Loan
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.
Read our Mozo Review to learn more about this Macquarie Basic Home Loan
Read our Mozo Review to learn more about this Macquarie Offset Home Loan
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.
Read our Mozo Review to learn more about this ANZ Fixed Rate
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Thinking of fixing your home loan rate this month? While there are benefits to freezing your interest rate, such as consistent repayments and avoiding interest rate hikes, it’s worth considering where fixed home loans are at right now and, in particular, where interest rates may go in the near future.
Back in May 2022, when the cash rate was at a rock-bottom 0.10%, the average variable rate was down at a low 3.02% p.a. (OO, P&I, $400k, <80% LVR). Similarly, the average 1-year fixed rate home loan was down 3.09% p.a. (OO, P&I, $400k, <80% LVR).
Back then, you probably wouldn’t have considered locking in your rate, as variables were a pretty good deal. However, as the Reserve Bank of Australia (RBA) raised the cash rate in response to inflation, people on variable rates chose to fix their home loans to avoid these rate changes and save money.
Now that inflation is slowing down, and the discussion is shifting towards rate cuts, fixed interest rates are becoming less appealing. This is because many believe variable rates will come down as the cash rate does, which some predict will happen as early as November of this year.
In the meantime, it’s worth comparing fixed home loans, using average rates as a reference point, and deciding for yourself whether a fixed rate is right for you.
A fixed rate home loan has an interest rate that is ‘locked’ for a certain period. In Australia, fixed home loans mostly range from 1 to 5-year terms.
The main benefit of a fixed rate is that your repayments won’t change until your fixed term ends, after which you’ll have the option to fix your rate again, switch to a variable revert rate, or refinance.
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The revert rate of fixed rate loans (the rate you’ll get at the end of the fixed period) can often be higher than the market rate, so shop around at the end of the fixed term or negotiate a better deal with your lender to avoid getting stung.
During the pandemic, both variable and fixed interest rates were much lower than they are today, thanks to a low cash rate.
When it started to look like interest rates were about to shoot back up, a lot of people fixed their home loan interest rates to avoid rising mortgage repayments.
The average fixed home loan rate is now significantly higher than they were during the pandemic.
Given that economists from the Big Four banks are talking about a rate cut sometime between November 2024 and May 2025, fixing your rate now could result in you missing out on falling interest rates in the future.
However, if it looks like interest rates are going to rise again, it could be worth getting a fixed rate home loan over a variable rate, as its function is to keep your repayments from rising.
If you’re keen on fixed rates, comparing your options is crucial. On the average-sized Australian mortgage of $607,963, the differences between the lowest fixed rates and the average Big Four fixed rates, is surprising.
For instance, the average 3-year fixed rate for a Big Four home loan in the Mozo database is 6.69% p.a. (OO, P&I, $400k, <80% LVR, as at 3 July 2024). On this rate, your initial monthly repayment would be $4,177.
Compared to the lowest 3-year fixed rate in the Mozo database, at 5.48% p.a. (OO, P&I, $400k, <80% LVR, as at 3 July 2024), you could stand to save $451 per month, with a monthly mortgage bill of $3,726.
When you compare your options for fixed rates, pay special attention to:
Fixed rate home loans can be light on features, but some do carry the same interest-saving features as variable home loans these days.
These features include:
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A fixed rate home loan is a loan with an interest rate that is locked in for the duration of the fixed term. This means you’ll know exactly what your repayments will be from the start and won’t have to worry about them changing until the fixed term ends.
There are some common fees that are payable upfront, and some fees payable on an ongoing basis or at loan termination with fixed rate home loans.
These include:
If you decide to switch loans during the fixed period or pay out the loan early you might have to also pay a break fee that will be determined by your lender based on the rate you’re currently.
This is where Mozo's handy calculators come in. We can help you compare fixed rate home loans with variable rate loans or compare fixed rate terms to find the best home loan for you.
Here's a rundown of our top tools:
Once your fixed term ends, the revert rate will automatically kick in unless you negotiate an alternative with your lender. This rate is typically much higher than the rate you signed up for, and can make quite a large impact on your monthly repayments.
A fixed rate can be preferable if you want to know how much you’ll be repaying each month and don’t want to be blindsided by any rate hikes. In contrast, variable rates fluctuate over time and could require you to make constant adjustments to your monthly budget.
Fixed rates offer more predictability than variable rates when it comes to monthly repayments, but there are tradeoffs.
Fixed rates are priced according to future expectations, making them a good barometer for where interest rates are heading. For the fixed rate to be worthwhile, interest rates would need to rise beyond the lender’s expectations. This is why fixed rates are always a bit of a gamble — consumers will rarely have access to the same data lenders have, making it very difficult to beat them on pricing.
Yes. If you’re currently on a variable rate and want to switch, you can call your lender to do so or commence the process yourself via online banking or your lender’s app.
There are some aspects to a fixed rate home loan that borrowers might not appreciate. For one, many limit the amount of extra repayments you can make, or even restrict them altogether. If you come into a lump sum of money or generally have plans to pay off your loan ahead of schedule, this can be a major impediment.
Fixed rate home loans also come with some rather expensive break costs, which will apply if you want to sell your property, top up your loan, pay off your loan early, or refinance to a cheaper option.
Even if you’ve been approved for a fixed rate loan, your lender can change their rates in the time it takes to finalise your application and advance your funds. That means you might lose out on the low fixed rate that you were drawn to in the first place.
A mortgage rate lock can help by locking in the rate you were offered at the time of approval. Most lenders will charge a fee (either a flat fee or a percentage of the loan balance), but it can be worth it if you’re able to save money in the long run.
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I would suggest shopping around. I went with one of the big 4 because it was a trusted brand and I have had nothing but trouble. Constant miscommunication - due to a bank error I missed out on a fixed portion of my loan. They take no accountability for their mistakes and except you to just deal with it.
Read full reviewI would suggest shopping around. I went with one of the big 4 because it was a trusted brand and I have had nothing but trouble. Constant miscommunication - due to a bank error I missed out on a fixed portion of my loan. They take no accountability for their mistakes and except you to just deal with it.
I've had a CBA account since I was in primary school, all of my experiences with them on a personal level have been positive. Our current home loan has been refinanced with CBA, the options and drawbacks of each mortgage type are clear on the website and in the PDF options. Not being able to have an offset account with a fixed rate is the only drawback I've found, but it *did* allow us to lock in a lower rate than other banks. CBA were also one of the only banks that allowed us to finance our home with a 10% deposit.
Read full reviewI've had a CBA account since I was in primary school, all of my experiences with them on a personal level have been positive. Our current home loan has been refinanced with CBA, the options and drawbacks of each mortgage type are clear on the website and in the PDF options. Not being able to have an offset account with a fixed rate is the only drawback I've found, but it *did* allow us to lock in a lower rate than other banks. CBA were also one of the only banks that allowed us to finance our home with a 10% deposit.
Bankwest offers user-friendly digital services, competitive rates, and helpful customer support, making banking convenient. However, some may find limited branch locations a drawback. Be aware of potential fees and ensure their product offerings match your financial needs before committing. Overall, it's a solid choice for tech-savvy users.
Read full reviewBankwest offers user-friendly digital services, competitive rates, and helpful customer support, making banking convenient. However, some may find limited branch locations a drawback. Be aware of potential fees and ensure their product offerings match your financial needs before committing. Overall, it's a solid choice for tech-savvy users.
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