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Compare 5 year fixed mortgages

Compare mortgages and calculate mortgage repayments - Data last updated on 21 Nov 2017

Compare 5 year fixed mortgages

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Five-year fixed mortgages provide a fixed interest rate for five years after which your mortgage will revert to a variable interest rate that will fluctuate with the cash rate for the remaining life of the loan.

Fixing for five years

The five-year fixed mortgage option may be attractive to you if you will need some time to stabilise your finances after buying a house.

For example, if you are buying your first home and will need to spend some time building up your furniture and homewares collection fixing your mortgage rate for five years will allow you to budget easily. The extra time you save by already having your budget decided can be used to find the best furniture deals and decorate your new home.

What happens at the end of a five year fixed mortgage rate?

Once this fixed period comes to an end, typically your mortgage rate will revert to your lender’s standard variable interest rate. That being said, your bank should offer you the opportunity to apply for another fixed term if that’s what you are after, or the option to move to a more basic variable home loan option.

Regardless of which option you take, it’s important to budget for a hike in your interest rate after your fixed term expires, just in case interest rates have gone up in this time period. You can use a home loan calculator to estimate your monthly repayments at various different interest rates. This will allow you to budget for rate increases and see if you would be able to comfortably pay off your mortgage in different scenarios.

What about a split loan?

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still retain some of the additional features variable loans typically provide such an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

Start comparing

If you think that a five year fixed mortgage is the right option for you then the next step is to start comparing and researching different loans. By using a comparison site you can look at not only the advertised interest rate but also the comparison rate that includes any other expenses associated with the loan including fees.

Compare some of the best five year fixed mortgage rates on the market below.

FAQs

The comparison rate is a more inclusive way of comparing home loans that factors in not only on the interest rate but also the majority of upfront and ongoing charges that add to the total cost of a home loan.

The rate is calculated using an industry-wide formula based on a $150,000 loan over a 25-year period and includes things like revert rates after an introductory or fixed rate period, application fees and monthly account keeping fees.

In Australia, all lenders are required by law to publish the comparison rate alongside their advertised rate so people can compare products easily.

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