Compare fixed rate home loans for May

Fixed rate home loan can be a great option if you'd prefer to lock in your repayments rather than risk interest rate hikes. We compare fixed rate loans from more than 80 lenders to help you find one that’s right for you.

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Home loan comparisons on Mozo - last updated 26 May 2024

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Interest rates change regularly - stay informed.

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May Fixed Home Loan Monthly Snapshot

After yet another Reserve Bank of Australia (RBA) cash rate hold in May, the Mozo database tracked a series of fixed home loan hikes, including one from a major bank. 

While the average fixed home loan rate (OO, P&I loans at $400k with a <80% LVR) has grown slightly since the start of the month, the database did record a few notable cuts, coming mainly from mutual banks. 

Fixed home loan rate moves

Macquarie increased rates on its Basic Home Loan and Offset Home Loan (Package) for all loan terms. 

Great Southern Bank increased fixed rates across almost all term lengths on its Fixed Rate Loan.

Resi and Yellow Brick Road cut rates on 1- to 3-year Select Fixed Home Loans, but increased their 4- and 5-year rates. 

MyState Bank increased its 2- and 3-year Fixed Rate Loan rates for owner occupiers and investors. 

Bank of Sydney cut its fixed rates for investors on the Expect More Home Loan Package on most term lengths.

Southern Cross Credit Union raised its 3-year fixed rates on the Premium Home Loan for owner-occupiers and investors. 

The Your Way Home Loan from Firefighters Mutual Bank, Health Professionals Bank, and Teachers Mutual Bank cut its 2- to 5-year rates. However, the packaged version, the Your Way Plus Home Loan which comes with an offset account, had some quite sharp increases. 

The movements our database has tracked since 1 May 2024 have caused the average fixed home loan rate to rise across all loan terms.

Average fixed home loan rates in May 2024 

In the Mozo database at 16 May 2024 for OO, P&I loans at $400k with a <80% LVR. 

  • 1 year fixed: 6.49% p.a. 
  • 2 year fixed: 6.36% p.a. 
  • 3 year fixed: 6.28% p.a. 
  • 4 year fixed: 6.51% p.a. 
  • 5 year fixed: 6.54% p.a. 

Lowest fixed home loan rates in May 2024 

In the Mozo database at 16 May 2024 for OO, P&I loans at $400k with a <80% LVR. 

  • 1 year fixed: Police Credit Union Fixed Rate Home Loan | 5.79% p.a. (7.38% comparison rate*)
  • 2 year fixed: Australian Mutual Bank First Home Buyers 2 Year Fixed Rate | 5.53% p.a. (6.30% comparison rate*) 
  • 3 year fixed: Australian Mutual Bank Fixed Rate Home Loan | 5.48% p.a. (6.24% comparison rate*)
  • 4 year fixed: People's Choice Fixed Rate Home Loan | 5.79% p.a. (6.34% comparison rate*)
  • 5 year fixed: Australian Mutual Bank Fixed Rate Home Loan | 5.63% p.a. (6.16% comparison rate*). 

It’s important to realise that, just because a fixed home loan has one of the best interest rates, it doesn’t make it suitable for everybody. That’s why you should always do your due diligence and compare fixed-rate home loans. 

Knowledge Hub

What is a fixed rate home loan?

A fixed home loan rate is a mortgage with an interest rate that is set for a certain period of time (called a fixed term). Most banks in Australia offer fixed rate terms of between 1 and 5-years.

The key benefit of a fixed home loan is that during the fixed term, your home loan repayments won't change, which means you can budget accordingly.

Fixed rate home loans are less popular in Australia than variable rate home loans, but they can have advantages. It's important to weigh up the pros and cons when comparing home loans.

Woman thinking about fixed home loans

Hot tip!

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.

Man thinking about fixed home loan ending

What happens when your fixed term ends?

At the end of the fixed term, borrowers have the option to select another fixed home loan term or switch to a variable interest rate loan.  

The variable rate you roll onto at the end of a fixed term can sometimes be considerably higher than the fixed interest rate, which will increase your repayments.

You can try our fixed rate ending calculator to help you work out what your new home loan repayments might be when your fixed rate loan ends.

Ideally, you should be considering your options for refinancing at least 6 weeks prior to your fixed rate loan ending.

How to compare fixed rate home loans

There are several factors that you should take in consideration when comparing fixed rate home loans. 

  • Interest rate. The interest rate is what a lender charges on a per annum basis to let you borrow money. Make sure to look at the comparison rate, which includes fees to show you accurately how much you pay.
  • Fixed loan term. This is the period of time that the fixed rate will apply. Lenders typically offer fixed terms ranging from 1 to 5-years, with different interest rates available on each option.
  • Fees. Common fees you might encounter with a fixed rate home loan include application fees, property valuation fees, monthly or annual fees, settlement fees, and break fees.
  • Loan features. While fixed rate home loans offer stability, this often comes at the cost of flexibility and features. You aren't likely to find free extra repayments and offset accounts on fixed home loans.

How to find the best fixed rate home loan

No one home loan will suit everyone, but comparing fixed home loans can get you closer to finding the right one for your needs. A good place to start your fixed-rate comparison is by checking out the best fixed rate home loans in Australia for 2024. 

Man identifying needs

Identify your needs

Knowing that your interest rate won’t change can make it easier to budget and provide peace of mind in times when interest rates are rising. But what’s the best amount of time to lock in a rate? And how can you be sure a loan is actually good value for money?  

Compare fixed home loans

Compare fixed loan options

The fixed home loan table above provides a snapshot of some loans in the market, but you can browse the full range of fixed rate home loans we compare too. This can give you an idea of the rates currently being offered by the major banks and other lenders. 

Woman reading fine print

Read the fine print

Make sure you’re familiar with all the details before you sign up. The product disclosure statement available on a lender’s website will outline all the important bits of information — including any fees, restrictions, and penalties that might apply. 

Pros of a fixed home loan

Some of the main pros of a fixed home loan include:

  • Protection against rate hikes. Every time the Reserve Bank of Australia (RBA) hikes the official cash rate, you don't have to stress about your mortgage repayments going up.
  • Easier budgeting certainty. Fixing your home loan means your repayments will stay the same, at least until the fixed period ends. This makes it easier to plan for other expenses. 

Cons of a fixed home loan

  • You won’t benefit from rate cuts. You won't experience the savings when the RBA cuts the cash rate. 
  • Limits on features. Fixed rate home loans are far less flexible in terms of features.
  • Break fees. If you want to refinance, ending a fixed term early can some with serious fees. 
Phone features of a fixed home loan

What are the features of a fixed rate home loan?

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:

Is a fixed rate home loan the right choice for me?

During periods when interest rates are heading up, signing up for a fixed rate and opting out of all the uncertainty might seem tempting. But you should weigh the pros and cons before making a decision.

One thing to keep in mind is that fixed rates tend to be more expensive than variable rates because if interest rates are predicted to rise, lenders will set their fixed rates higher to get ahead of the curve.

So instead of asking yourself whether a fixed rate will save you money, it might make more sense to ask what type of loan you want.

If you would rather one with predictable repayments and don’t mind a few restrictions when it comes to features, a fixed rate could suit you.

Woman thinking about fixed rate home loans

Fixed rate home loan calculators

Free tools to help you crunch home loan costs! See more

FAQs

What is a fixed rate home loan?

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.

How do fixed rate home loans compare on fees?

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:

  • Application fee
  • Service fee (monthly or annual)
  • Discharge fee.

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.

How do fixed rate loans compare on cost?

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:

  • Market snapshot table: A selection of advertised fixed rate deals to help you compare rates and features of banks with fixed rate loans keen for your business. You'll find this table at the top of this page.
  • Repayment calculator: Mozo's home loan comparison table will help you to crunch the numbers based on your loan amount and the value of the property. You can then filter by the fixed rate term and our mortgage repayments calculator will show you how much your monthly repayments will be.
  • Comparison Calculator: Can't decide between two fixed rate loans? Simply plug in the details of each loan into the calculator and it will show you which loan will be cheaper.
  • Rate change calculator: Wondering how long you should fix for or when it would be cheaper to get a variable rate loan? Play around with our rate change calculator to see how much your repayments would go up on a variable rate if rates were to change.
  • Reviews. Thousands of customers have reviewed their home loan on Mozo so read up to see what they say about the fees and costs of their fixed loans before you take the home loan plunge. Check out our home loan reviews here.
What are my options once the fixed term is up?

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.

Are fixed rate home loans better than variable rate home loans?

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.

Is it a good time to take out a fixed rate home loan?

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.

Can I switch to a fixed rate home loan?

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.

What is the worst thing about a fixed rate loan?

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.

What is a mortgage rate lock?

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.

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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JP Pelosi

RG146
Managing editor

Jean-Paul (JP) Pelosi is an experienced journalist and editor who has contributed to many of Australia's leading media outlets including The Guardian, News.com.au, Domain.com.au, Investment Magazine and ANZ's Bluenotes. He has also edited news and communications for large financial services companies such as CommBank, Suncorp, Allianz and Amex. He likes a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

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Evlin DuBose

RG146
Senior Money Writer

Evlin is RG146 certified for general advice (Tier 2) and has become a leading voice in finance news since joining Mozo two years ago. She is regularly featured in Google's Top Stories alongside major publications like News.com.au and Yahoo Finance, and seasoned journalists. Despite being in the industry for just two years, she is Mozo's go-to writer for all things RBA and her research has been referenced by the Victorian Government. With a Bachelor of Communications degree from UTS, where she won the Dean's Merit Award and acted as the Director of Student Publications.

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