Compare fixed rate home loans^

Find home loans from a wide range of Australian lenders that best suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more. - Data last updated on 15 Nov 2018

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Compare fixed rate home loans

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Learn more about fixed interest rates

Some lenders allow you to fix the interest rate on your mortgage for a limited time, so you can enjoy greater financial security and stability, as well as simpler budgeting.

Why a fixed interest rate?

By fixing your interest rate, you’ll know in advance just how much your mortgage repayments will cost from month to month for the duration of the fixed term. Even if your raises its variable interest rates, your home loan’s fixed repayments will remain just as affordable during the fixed term.

On the other hand, if your bank cuts variable home loan rates, this won’t apply to your fixed rate home loan – you’ll keep making the same interest payments until your fixed term ends. Also, fixed rate home loans are more likely to lock you into a fixed repayment plan, with significant break fees if you change your loan terms before the fixed period is up.

Most interest rates can only be fixed for a limited number of years, and afterwards will revert to the lender’s standard variable rate. If you don’t plan your budget accordingly, you could find yourself surprised by a sudden jump in repayments, especially if interest rates rose significantly during your loan’s fixed term.  

Fixed interest rate pros and cons

Pros
  • Consistent repayments each month
  • Simplified budgeting
  • Protection from interest rate rises
Cons
  • No benefit from interest rate cuts
  • Less repayment flexibility
  • Costly break fees

Should you split your rate?

If you want the security of a fixed rate home loan, but would also appreciate the flexibility of a variable interest rate, you may be able to get the best of both worlds with a split rate home loan. 

These mortgages charge a fixed rate of interest on a percentage of your loan’s balance, and a variable rate on the remainder, so you can enjoy some savings when interest rates are cut, but keep your repayments manageable if rates rise.  

What are Comparison Rates?

Most lenders not only charge interest on their mortgages, but fees as well. Even if you choose a home loan with an affordably low fixed interest rate, if your lender also charges high fees, you may ultimately end up paying more for your property than if you’d opted for a mortgage with a higher interest rate and lower fees and charges.

To help show the overall cost of different loans more clearly, lenders are required to display Comparison Rates alongside their advertised interest rates. These percentage figures combine the overall cost of each loan’s interest rate and its standard fees and charges, and can be used to approximately gauge the relative affordability of different loans.

It’s worth remembering that some loans also have nonstandard costs that aren’t included in their Comparison Rates, and that Comparison Rates also don’t account for any bonus features that could add extra value to certain loans. It’s usually worth doing some further research after narrowing down your shortlist of mortgage options by their comparison rates.

How your loan term affects your interest

The length of the fixed-rate period on your home loan is important, as this is the length of time that your repayments will remain unaffected by rate rises. But it’s also important to think about the overall length of your home loan’s term, as this can affect how much interest you’ll pay in total over the lifetime of the loan.

Most mortgages start with a term of 25 or 30 years, though shorter and longer options are available from some lenders. If you choose a shorter home loan, you’ll make a smaller number of repayments, each one for a larger percentage of the loan’s principal. While a short home loan may cost you more from month to month, fewer repayments also means fewer interest charges, so you’ll likely pay less interest in total over the lifetime of the loan.

Conversely, stretching out your home loan over a longer term means making more repayments, each one for a smaller percentage of the principal. While each of these repayments may be more affordable from month to month, you’ll be charged interest a greater number of times, and may ultimately end up paying more in total interest than if you’d opted for the shorter loan term.

Fixed rate home loans for different buyers

First home buyers often find the security of fixed rate home loans appealing, as their stability over the first few years of a mortgage can help borrowers keep their finances under control while they build up their equity.

Investors can also find the stability of fixed rate home loans useful, as they can help keep the loan’s repayments from increasing beyond the property’s rental income during the fixed period, ensuring a steady stream of income from the investment.

In either case, borrowers should remember that when their fixed rates expire, they will revert to the lender’s standard variable rates – be sure to budget accordingly!

Refinancing a mortgage onto a lower interest rate can help to reduce your repayments, making your loan more affordable. If your lender lets you fix this interest rate for a few years, you can keep enjoying this extra affordability for longer. This can be good news for both investors and owner occupiers, especially those who are buying their next home.

Offset accounts and redraw facilities

Fixing the interest rate on a home loan often also means agreeing to a fixed repayment plan, where you’re required to make your scheduled repayments for the duration of the fixed rate period. This may limit your ability to pay extra money onto your mortgage and get ahead on your repayments, even if the money becomes available from a tax refund, a work bonus, or a statistically-improbable lottery win.

But some lenders allow borrowers to freely make extra repayments onto their fixed rate home loans, and a few even offer some additional features to help provide further financial flexibility.

A redraw facility will allow you to make withdrawals from the surplus balance on your home loan when you get ahead on your repayments, subject to your lender’s terms and conditions. This means that if you have spare savings available, you can add them onto your mortgage to reduce your interest charges and get closer to making an early exit from the loan, confident that you can still put this money back in your pocket again in case of emergency.

An offset account works just like a regular savings or transaction account, but with one major difference – it’s linked to your mortgage. Whatever money you pay into an offset account is included when your lender calculates its interest charges, which can help save you money on your mortgage.

Example

If you have $15,000 in your offset account, and have paid back $200,000 of a $500,000 loan, you’ll only be charged interest on $285,000, rather than $300,000, saving you a bit of money.

Compare fixed rate home loans

With a variety of fixed rate home loan options available to choose from, what is the best way to make your mortgage decision? While low interest rates are important to consider when looking at any home loan, there are also comparison rates, terms and conditions to keep in mind.

RateCity provides you with the essential details of Australia’s many fixed rate mortgages, and puts them all in one place for simple and efficient reference. With the help of this information, you can determine which lenders offer the interest rates and home loan features that best match your financial situation, and make a more informed decision when selecting your next mortgage lender.

FAQs

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

Split rates home loans

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 wants to retain some of the additional features variable loans typically provide such as 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.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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