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Australian Credit Licence 395219Fees & charges apply

5.69%

6.16%

$3,127

  • Owner Occupied
  • Fixed undefined year
  • P&I
  • Extra repayments
More detailsmore-details

Australian Credit Licence 395219Fees & charges apply

Australian Credit Licence 234527Fees & charges apply

6.04%

7.16%

$3,234

  • Cashback
  • Owner Occupied
  • Fixed undefined year
  • P&I
  • Extra repayments
Enquire

Australian Credit Licence 234527Fees & charges apply

Australian Credit Licence 234527Fees & charges apply

6.34%

7.22%

$2,642

  • Cashback
  • Owner Occupied
  • Fixed undefined year
  • Interest Only
  • Extra repayments
Enquire

Australian Credit Licence 234527Fees & charges apply

Australian Credit Licence 395219Fees & charges apply

7.75%

6.31%

$3,229

  • Owner Occupied
  • Fixed undefined year
  • Interest Only
More detailsmore-details

Australian Credit Licence 395219Fees & charges apply

Australian Credit Licence 229823Fees & charges apply

5.99%

6.15%

$3,218

Fixed Rate Loan (w/Orange Advantage)
  • Owner Occupied
  • Fixed undefined year
  • P&I
  • Offset Account

Australian Credit Licence 229823Fees & charges apply

Australian Credit Licence 237502Fees & charges apply

5.65%

6.54%

$3,115

Offset Home Loan
  • Fixed undefined year
  • P&I
  • Offset Account
  • Extra repayments

Australian Credit Licence 237502Fees & charges apply

Australian Credit Licence 238981Fees & charges apply

7.39%

6.57%

$3,659

Your Way Plus Fixed Home Loan
  • Owner Occupied
  • Fixed undefined year
  • P&I
  • Offset Account

Australian Credit Licence 238981Fees & charges apply

Australian Credit Licence 238981Fees & charges apply

7.39%

6.57%

$3,659

Your Way Plus Fixed Home Loan
  • Owner Occupied
  • Fixed undefined year
  • P&I
  • Offset Account

Australian Credit Licence 238981Fees & charges apply

Australian Credit Licence 243444Fees & charges apply

7.09%

6.76%

$3,563

Expect More Home Loan
  • Fixed undefined year
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Australian Credit Licence 243444Fees & charges apply

Australian Credit Licence 238981Fees & charges apply

7.19%

6.83%

$3,595

Your Way Plus Fixed Home Loan
  • Owner Occupied
  • Fixed undefined year
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  • Offset Account

Australian Credit Licence 238981Fees & charges apply

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Compare some of Australia's best fixed-rate home loans for March 2023

Even though fixed interest rates stay the same during their fixed rate term, banks and mortgage lenders regularly reassess home loan interest rates, including for new customers. If you’re in the market for a fixed rate home loan, you may want to compare some of the most competitive fixed rates each month so you can make up-to-date repayment calculations:

What is a fixed home loan rate?

When repaying a mortgage, you will not only be paying off the loan amount (the principal), but you’ll also be charged interest on your home loan. This interest may be charged at a fixed rate or at a variable rate.

A fixed interest rate is locked in, and will not change for a set period. This is typically from 1 to 5 years, though some lenders may offer longer fixed terms, such as 7 to 10 years.

A variable rate is subject to change as influenced by the Reserve Bank of Australia’s (RBA’s) cash rate, the Australian economy, and other factors affecting the mortgage lender.

Homeowners can also choose both options, resulting in what’s known as a ‘split rate’ loan. This is where interest is charged on part of your loan at a fixed rate, and on the remainder at a variable rate. 

Fixed rate home loans are available for both owner-occupiers and investors. Whether you’re a first home buyer or a long-time investor, if you meet the lender’s eligibility criteria, you may be able to apply for a fixed rate home loan.

What are the pros and cons of a fixed rate mortgage?

One of the main benefits of a fixed rate mortgage is predictability. Since the interest rate on your mortgage doesn’t change for the duration of the fixed term, it’s easier to plan your finances and budget, as you know how much your mortgage repayment will be each month.

You may also be more immediately protected from interest rate fluctuations with a fixed rate home loan, which are likely to occur over a 20–30-year mortgage. If rates were to rise during the fixed period, whether due to the cash rate lifting, or your lender hiking out-of-cycle with the RBA, your mortgage repayments will stay locked in.

However, if rates were to decrease, your mortgage repayments may be fixed at a higher rate. This may cause you to potentially miss out on lower mortgage repayments from a rate cut because you opted to fix your home loan.

Further, fixed rate mortgages may be more limited in their flexibility. Variable rate home loans generally come with features such as an offset account or a redraw facility, which aren’t always available for fixed-rate loans.  And if you want to refinance your home loan and you've fixed your interest rate, you may have to pay break costs for ending the fixed rate period early.  

Pros of fixed rate home loans:

  • Good for budgeting
  • Protected from rate hikes

Cons of fixed rate home loans:

  • Miss out on rate cuts
  • Less flexibility

Remember to weigh the pros and cons of a fixed rate home loan against your financial situation and goals to determine whether it’s the right option for you. A fixed rate mortgage may offer more stability in your budgeting but you’ll likely find your options limited when it comes to flexibility in managing your loan.  

What are the features of a fixed rate home loan?

Fixed rate home loans generally come with fewer features than variable rate home loans. If home loan features are something you want to prioritise in your comparison, this may affect your choice between fixed or variable rate loans.   

Home loan features may include an offset account, redraw facility and making extra repayments. Some lenders may reserve these features for their variable rate products only, or charge fees for any additional repayments made with a fixed mortgage. You may also find that some home loan offers, such as cashback deals or packages, are reserved for variable rate home loans as well. 

It may be worth reviewing what features, if any, are available with a fixed rate home loan before applying.

How long can you fix a home loan rate for?

While a home loan term is generally around 20-30 years, your fixed rate period is usually much shorter. You’ll have the choice of fixing your home loan rate for between 1 and 5 years, with longer terms up to 10 years potentially available from some lenders. 

This is for your benefit and the lender's, as you wouldn’t want to lock yourself into a record-high rate and then miss out on lower rates in the future. On the other hand, lenders make money from the interest you pay, so it’s not in their best interest to let homeowners stay on record-low rates for 20+ years either.

With 10-year fixed rates being rare, you may want to start a search for a fixed rate loan looking at 3-year fixed rates4-year fixed rates, or the more standard maximum length, 5-year fixed rate loans

Once the fixed rate term ends, your home loan will generally switch to the lender's standard variable rate, also known as a ‘revert rate’. It’s worth being aware of your lender’s revert rate if your fixed rate term is coming to an end, as the revert rate is generally higher than the fixed rates most lenders offer.

You generally have two options if your fixed rate term is ending and you don’t want to switch to the lender’s revert rate:

  • Request to re-fix your existing home loan. You’ll typically be put onto one of the lender’s current fixed rate options, but you do have the option to haggle to go on the same rate you are currently on.
  • Refinance your home loan. If you’re not happy with the variable interest rate or new fixed rate offered by your lender, you may want to consider if refinancing to a new home loan lender may suit your situation better.

Is now the right time to fix your mortgage?

Making the decision whether to fix your home loan rate is a tough one and requires you to do some research into the economy, the home loan market, as well as what may best suit your finances.

There are a few things to keep in mind when making this decision:

  • The Reserve Bank of Australia (RBA)

Often, the biggest question facing homeowners is whether they should fix now or wait to see if rates change further. This is where it’s important to remember that no one can predict where the market may move next with 100 per cent accuracy. What we do know is that the days of home loan interest rates in the teens have been gone for several decades.

Australia recently experienced the lowest home loan rate environment in its history. This was due to the state of the Australian economy, as well as the Reserve Bank of Australia (RBA) cutting the cash rate down to a record-low number, having not raised the cash rate in over 11 years.

However, from May 2022 the RBA began raising the cash rate to help tackle inflation. With the cash rate likely to lift higher in the future, you may want to consider fixing to try and prevent rate hikes from affecting your repayments. Remember that if your lender changes its fixed rates between your application and its approval, you could end up paying a higher rate on your home loan, unless you opt to pay a rate lock fee.

  • The Australian economy

The RBA takes stock of what is happening on a domestic and international scale when making its decision around whether to change the cash rate. This means that you may want to do the same when deciding whether to fix.

Events such as the COVID-19 pandemic, share market crashes and general volatility may significantly affect the decision of the RBA, as well as your lender, around lifting interest rates. It may be worth doing your research in this area to make a more informed decision around if, and when, rates may lift again.

  • The home loan that suits you best

Mortgage lenders frequently lift and cut interest rates out-of-cycle with the RBA. Trying to lock in the perfect moment to fix may be a fool’s errand. This means you may be better off weighing up the RBA’s movement and the economy against whether a fixed rate home loan suits your budget and finances more than a variable rate loan.

For example, imagine you opt for a variable rate home loan with an offset account. Your lender hikes your variable rate a few years into your repayments, but you may not feel the impact as much as you’ve been steadily depositing funds into your offset account. 

This is why choosing the right repayment option for your home loan is also about comparing any potential upfront or ongoing fees, and the features and flexibility offered by the loan. 

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What is a split interest rate?

Homeowners who don’t want to pick between fixed and variable rates could choose both. This is also known as a ‘split loan', or split interest rate, where interest is charged at a fixed rate on part of your mortgage principal and at a variable rate on the remainder. It doesn’t have to be 50/50 fixed and variable, but may be 80% fixed, 20% variable, or whatever the borrower and lender agree on.

A split rate home loan may offer the ‘best of both worlds’ for some home loan customers. You may be able to enjoy the perks and risks of both fixed and variable rate home loans, including access to features like an offset account, and easier budgeting with consistent part-payments of the mortgage.

However, your fixed portion of the home loan will also be locked into a set period, which may then revert to a variable rate. This revert rate may be higher than your fixed rate and different to your existing variable rate, meaning you may be paying interest at two different variable rates.

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How to compare fixed rate loans

It’s important to research and compare all your options when choosing your fixed rate mortgage lender. Thankfully, there are a range of comparison tools available that can help take the hassle out of this process, including:

  • Comparison rates 

There is more to a home loan than its interest rate. It’s important to compare other costs, such as upfront or application fees, ongoing fees like annual package fees, and any break costs. Comparison rates consider not just the advertised rate, but most of these upfront and ongoing costs, based on a $150,000 home loan over a 25-year term.

While that loan amount may be considerably lower than the average person’s mortgage – especially in a capital city - it may come in handy in helping to provide a more accurate picture of the 'true' cost of the loan. If the comparison rate is significantly higher than the advertised rate, it may be safe to assume the lender charges significant fees compared to other loan options.

  • Comparison tables

Comparison tables allow you to compare apples with apples. You can filter down and view a range of fixed rate home loans side by side as determined by your specific needs. You can use these tables to sort your results by factors important to your search, such as lowest rates or most features. This may help you to make an easy shortlist for your home loan comparison.

RateCity’s comparison tables also give you the option of comparing fixed rate loans against other lenders, including the big four banks. If you’ve only ever stuck with the bank of your childhood, this feature may help you determine which lender could provide the best value fixed rate home loan.

  • Home loan calculators

Home loan calculators can help you in your fixed rate home loan search. A borrowing power calculator may help indicate just how much you may be approved to take out in a mortgage. RateCity’s Borrowing Power Calculator may also be able to point you towards lenders that may approve borrowers for said home loan amount.

The Mortgage Repayment Calculator may help you to narrow down your shortlist of home loan options based on which best suits your budget. Enter your details, including interest rate, loan amount, borrower type (owner-occupier or investor), repayment type (principal & interest or interest only) and repayment frequency (weekly, fortnightly or monthly repayments) to see your estimated mortgage repayments, including interest repayments.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

How long do banks keep mortgage records?

Financial institutions are required to retain records for up to seven years after a transaction is complete. It means your bank will retain a copy of your mortgage records for up to seven years after the mortgage is discharged and your loan is paid off. 

Fact Checked

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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^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, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.