fixed rate home loans

Compare Fixed Rate Home Loans

A fixed rate home loan is a great option if you'd prefer to lock in your repayments, rather than risk variable rates and bank interest rate changes. 

Use our home loan comparison calculator below to find the right fixed rate loan for you. It gives you a snapshot of different costs and benefits, interest rates, mortgage repayments and fees. Start comparing home loans now.

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Fixed rate home loan comparisons on Mozo - last updated 24 May 2022

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  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    3.59% p.a.
    fixed 1 year
    2.54% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Compare
    Details
  • Own Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    2.99% p.a.
    fixed 1 year
    2.50% p.a.

    Competitive variable rates. Free extra repayments and redraws. No Lender’s Mortgage Insurance. Multiple offset accounts available. Fast digital application. 40% deposit required.

    Compare
    Details
  • Fixed Rate Home Loan

    Home Loan Package, Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    4.07% p.a.
    fixed 1 year
    3.27% p.a.

    Ability to split your home loan between Fixed and Variable. Dedicated Relationship Manager. Min 20% deposit. Receive $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 31 May 2022 and settle by 31 July 2022.

    Compare
    Details
  • Mozo Expert Choice Badge
    Fixed Rate Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.99% p.a.
    fixed 1 year
    2.76% p.a.

    Competitive fixed rates across 1 to 5 year terms. No application fee or annual fee. Free extra repayments (up to $10,000 per year). Winner of Australia's Best Large Mutual Bank 2021.

    Compare
    Details
  • Fixed Rate Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    3.39% p.a.
    fixed 1 year
    3.10% p.a.

    Fixed rate home loan with unlimited extra repayments without penalty and unlimited redraw facility.

    Compare
    Details
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*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

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FAQ

May fixed rate home loans update

The expectation that the RBA will begin tightening monetary policy this year has seen lenders scrambling to revise their fixed rates, with 71 of the 90 lenders we track hiking rates last month alone. 

At the time of writing, the average 2-year rate in our database sits at 3.60% p.a. (up from 2.22% p.a. in September 2021), while the average 5-year fixed sits at 4.64% p.a. (up from 2.79% p.a. in September 2021).

Many of the fixed rate offers below the 2% mark have since disappeared. The only holdout is Unity Bank’s 1.84% p.a. (4.05% p.a. comparison rate*) offer, however this is only available to first home buyers. Among lenders we track, the current rate leaders (OO, P&I) are:

  • 1-year: Police Bank | 2.29% p.a. (2.91% p.a. comparison rate*)

  • 2-year: Orange Credit Union | 2.45% p.a. (3.87% p.a. comparison rate*)

  • 3-year: Orange Credit Union | 2.99% p.a. (2.97% p.a. comparison rate*)

  • 4-year: Southern Cross Credit Union | 3.69% p.a. (3.11% p.a. comparison rate*)

  • 5-year: Australian Unity | 3.84% p.a. (3.35% p.a. comparison rate*)

Updated by: Niko Iliakis, home loans writer, 2 May, 2022.

Fixed home loan rates

To fix or not to fix? That is the question posed by many home buyers across Australia. To help you decide whether a fixed or variable interest rate is your borrowing match, we've compiled this quick guide that runs through the benefits of a fixed interest rate and the traps to watch out for. You can also use the above table to compare fixed rate home loans quickly and easily.

What do you need to know? 

A fixed home loan rate, as the name suggests, is an interest rate that is set for a fixed period of time. Most banks offer fixed rate terms of between one and five years, though some let you lock in a rate for as many as ten years. During this period you won’t be affected by any rate changes, meaning your repayments will stay the same and can budget accordingly.

At the end of the fixed period, borrowers will have the option to select another fixed term or switch to a variable rate loan. The revert rate - that is, the rate that the home loan will automatically revert to if no decision is made - is usually higher than the market rate, so be prepared to shop around at the end of the term or negotiate a better deal with your lender to avoid getting stung.

Fixed rate home loans: pros and cons

What are the advantages of a fixed rate loan?

1. Safeguard against rate hikes

Official interest rates might currently be at all-time lows, but they’re not going to stay that way forever. The RBA makes decisions to move the cash rate based on how the economy is faring, and banks sometimes make out-of-cycle decisions to hike their mortgage rates when profit margins are being squeezed. If either of those situations occur, having your rate locked in for a set period means you won’t be affected, and can continue to benefit from lower rates.

2. Increased 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, as you’ll know with certainty how much money you’ll have left over after each scheduled repayment. This can be particularly useful for borrowers who have just moved into their new home and are still dealing with moving costs or those who plan to renovate.

What are the disadvantages of a fixed rate loan?

1. You won’t benefit from rate cuts

Fixing your interest rate means it stays the same for the duration of the fixed term, regardless of whether official interest rates move up or down. This means that while you’ll be protected in the case of any rate hikes, you won’t see any benefit if rates go down. 

2. Limits on features

You might find that fixed rate loans aren’t as rich in features as the average variable rate loan. And even if you find one that comes with an offset account and the ability to make extra repayments, there might be fees or limits that can cut into the overall benefits offered. For example, your fixed loan might cap extra repayments at $10,000 per year, meaning you’ll incur penalty costs if you exceed this threshold.

3. Break fees

Exiting a fixed rate loan before the agreed date can be quite costly. So if you want to refinance to another loan or make significant adjustments to your current one, make sure you ask your lender to explain the fees involved and how they’re calculated.

How does a fixed rate home loan compare on features? 

There was a time when fixed rate home loans were light on features, such as offset accounts and the ability to make extra repayments. But many nowadays offer the same extras as variable home loans, albeit with more conditions and restrictions. We’ve detailed a few below.

  • Extra repayments: With a fixed rate home loan you may be able to make extra repayments, however there will most likely be a limit to how much you can make each year or over the term of the loan.
  • Redraw. If you can make extra repayments you may also have the ability to redraw this amount. A fee and minimum redraw amount will most likely apply.
  • Offset account: Some fixed loans will have an offset loan facility, but unlike a variable rate home loan where you can offset 100% of the loan amount, you might only be able to offset a portion, such as 10-40% of the loan.
  • Repayment flexibility: Just as with a variable rate home loan, most fixed loans will allow you to select the repayment frequency - weekly, fortnightly and monthly - that suits you.
  • Loan-to-Value ratio: Fixed home loan rates have different LVR requirements to variable rate loans so while you might need an LVR of 80% for a variable rate loan you may only need a LVR of 90% for a fixed term loan. 
  • Split loan: Many fixed rate loans will have the option of splitting a portion of the fixed loan with a variable rate. There may be some limits to how much you can split but it can mean that you get the benefits of rate certainty for the fixed portion of your loan and added flexibility on the variable.

What about price?

When the Reserve Bank of Australia cut interest rates and commenced its bond purchasing activities in March 2020, the majority of banks and lenders responded by cutting fixed rates and leaving variable rates unchanged. This shift saw fixed rates quickly overtake variable rates as the cheaper of the two. In fact, as of 3 June 2020, the average fixed rate among lenders we track sits a full percentage point lower than the average variable rate — 2.27% p.a. compared to 3.27% p.a.

Can you break a fixed rate loan early?

When you sign up for a home loan, your bank or lender funds the loan by borrowing money from wholesale money markets. And if you decide to fix your loan, the bank’s funding costs will also be fixed to hedge against any rate changes. For this reason, breaking your fixed contract early comes as a rather large inconvenience to your bank, as it’s still required to repay the loans it took out at a fixed rate until the end of the period. If your bank incurs a loss, it will pass the cost onto you in the form of a very hefty break fee. 

There are a few reasons why you might have to exit a fixed period early. These include deciding to sell your property, switching to a variable rate, refinancing to another lender, or paying off your loan in full. The size of the break fee will depend on a few factors, such as your current interest rate, your outstanding balance, and how much longer is left on your fixed rate term.

If you’ve decided that a fixed interest rate home loan is the right pick for you, then you’re going to have to start shopping around. Head on over to our Home Loan Interest Rates page for more information about comparing fixed rate home loans. 

Show transcript

When you’re taking out a mortgage, you’ll have the option to fix your loan. But what exactly is a fixed rate?

While variable rates move in line with the market, fixed rates remain the same until the fixed period ends.

That means you’ll know exactly how large your repayments will be, allowing you to budget accordingly.

The idea behind fixed rates is they allow you to lock in a good rate for your home loan, and guard against interest rate hikes.

The downside is that if interest rates start to drop, you won't enjoy any of the benefits.

Fixed rate terms usually range from 1 year up to 10 years, but the more popular options are in the 1 to 3 year range.

Once your fixed period ends, you’ll have the choice of fixing another term or going with a variable rate.

Something to watch out for is the revert rate.

That’s the rate that kicks in once your fixed period is over, and is usually much higher than the market rate.

Picture of JP Pelosi
JP Pelosi
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 loves a well told story and applying his editorial experience to content that readers both care about and enjoy. JP heads up our writing team.

More FAQs on Fixed Rate Home Loans

How do fixed rate home loans compare on fees?

As with variable rate home loans there are some common fees that are payable upfront, and some fees payable on an ongoing basis or at loan termination.

These include:

  • application fee
  • service fee (monthly or annual)
  • discharge fee

The biggest difference between the fees of a fixed and a variable rate home loan is if you decide to switch loans during the loan period or pay out the loan early. With a fixed rate loan you will be charged a 'break fee' and it can be very high. The break fee would be determined by your lender based on how much you have left of your term and the rate you locked your loan in for so it is very difficult to work out how much this will be in advance. You would need to get your lender to provide you with an estimate for this.

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.

Will interest rates go up any time soon?

Official interest rates are set by the Reserve Bank of Australia, and it has said on a number of occasions that it doesn’t intend to raise them until the labour market improves and inflation is within the 2-3% target band.

These economic targets are not expected to be met until 2024, at least according to the RBA’s current projections. But there is a chance it might be forced to move sooner, especially since many other central banks have brought forward their interest rate hike projections

Can I split my loan?

If you can’t decide between the certainty of a fixed and the flexibility of variable rate, you might want to consider splitting your loan. This divides your home loan into two smaller loan accounts — one allocated a fixed rate and the other a variable rate. 

This allows you to hedge against any future rate hikes, while also letting you take advantage of any rate drops (if only partially). Splitting your loan also means you can access the features typically associated with a variable rate loan, which usually come with fewer restrictions than fixed options.

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. 

To make sure you’re not left paying more than you need to be, it pays to have a plan in place for when your fixed rate term ends. This might involve calling your lender to see if they’re willing to offer you a better deal. If that doesn’t produce the desired results, there’s always the option to refinance to another lender.

Home Loan Reviews

Westpac Fixed Options Home Loan
Overall 1/10
Poor customer service and worst bank in Australia

Never trust the banking app and the repayments requirements for a loan through the app. Never contact the customer for missed or shortfall in repayment. The bank will let it go until it damages your credit rating. Worst customer service.

Read full review

Never trust the banking app and the repayments requirements for a loan through the app. Never contact the customer for missed or shortfall in repayment. The bank will let it go until it damages your credit rating. Worst customer service.

Features
1/10
Customer service
1/10
Convenience
1/10
Trust
1/10
Less
Jijin, New South Wales, reviewed 22 days ago
Bankwest Complete Fixed Home Loan (Package)
Overall 10/10
The best bank

I came over to BankWest 6 months ago and it is the best decision I made. Easy online banking, amazing service, great home loans, the best online chat assistance. The best bank, totally recommended.

Read full review

I came over to BankWest 6 months ago and it is the best decision I made. Easy online banking, amazing service, great home loans, the best online chat assistance. The best bank, totally recommended.

Price
10/10
Features
10/10
Customer service
10/10
Convenience
10/10
Trust
10/10
Less
Bee, New South Wales, reviewed 25 days ago
ANZ Home Loan
Overall 7/10
Smooth process and good customer service

Smooth process and good customer service

Read full review

Smooth process and good customer service

Price
10/10
Features
7/10
Customer service
7/10
Convenience
7/10
Trust
10/10
Less
Cindy, New South Wales, reviewed 27 days ago

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