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Mortgage rates lowest for borrowers who fix

Mortgage rates lowest for borrowers who fix

Two-year fixed mortgage rates are currently offering the lowest average rates, an analysis of home loans data has found.

At the end of February, the average of all the owner-occupied two-year fixed loans listed on RateCity was 4.16 per cent.

That was lower than the averages of the other fixed-rate options and also variable-rate mortgages.

The averages were:

  • Two-year fixed = 4.16 per cent
  • One-year fixed = 4.20 per cent
  • Three-year fixed = 4.24 per cent
  • Variable = 4.46 per cent
  • Four-year fixed = 4.60 per cent
  • Five-year fixed = 4.66 per cent

It was a similar story for investment mortgages, where two-year fixed home loans were again cheaper than all the other options.

The averages were:

  • Two-year fixed = 4.46 per cent
  • One-year fixed = 4.51 per cent
  • Three-year fixed = 4.54 per cent
  • Four-year fixed = 4.86 per cent
  • Variable = 4.91 per cent
  • Five-year fixed = 4.96 per cent

Mortgage interest rates getting dearer

Looking back over the previous year, the data shows that two-year fixed-rate mortgages had lowest average rates for every month between February 2017 and February 2018.

That was the case for both owner-occupied and investment home loans.

The data also shows that all categories of home loans became more expensive over the year.

Owner-occupied home loan rates

Date1-year fixed2-year fixed3-year fixed4-year fixed5-year fixedVariable
February 20174.16%4.10%4.14%4.50%4.59%4.35%
February 20184.20%4.16%4.24%4.60%4.66%4.46%
Difference+4 points+6 points+10 points+10 points+7 points+11 points

Investment home loan rates

Date1-year fixed2-year fixed3-year fixed4-year fixed5-year fixedVariable
February 20174.34%4.28%4.32%4.68%4.74%4.62%
February 20184.51%4.46%4.54%4.86%4.96%4.91%
Difference+17 points+18 points+22 points+18 points+22 points+29 points

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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