Fixed Rate Home Loans

Explore available fixed-rate home loans in the Australian housing market with OzBroker.

In Australia, when you’re exploring home loans, you typically encounter three main options:

  1. Fixed-rate loan
  2. Variable-rate loan
  3. Split loan

With fixed-rate home loans, your interest rates remain constant for a specified duration, usually between 1-5 years. Unlike variable-rate loans, this ensures that your payments stay the same during this period, regardless of market interest rate fluctuations.

Timing Your Fixed-Rate Mortgage Decision

Selecting an appropriate loan is essential, but it’s equally crucial to time your fixed-rate choice wisely. Locking in a rate when it’s high can be frustrating, especially if the Reserve Bank later reduces interest rates. It’s often more advantageous to opt for a fixed rate mortgage when the economy is stable and interest rates are low, shielding yourself from potential financial instability and fluctuating rates.

Many Australians, fearing further rate increases, unfortunately, fix their rates when they are high. Given that three to five years is a considerable period, it’s important to carefully consider the interest rate type you choose.

Selecting the Right Lender

Often, people directly approach their banks, hoping to secure a favourable rate. However, this method is not always effective as fixed rates vary significantly across major banks and other lenders due to their individual predictions about future interest rate movements.

A mortgage broker, like OzBroker, can advocate for you and negotiate attractive offers from various lenders.

Consider Whether to Fix

Many who opt for a fixed-rate loan might actually benefit more from a variable rate. A fixed-rate loan is like a binding agreement – breaking it can be expensive.

Avoid fixing your interest rate if you intend to:

  • Sell your property
  • Make significant lump-sum repayments
  • Refinance your home loan

Tip: Opting for flexible fixed rates (a combination of fixed and variable) can be helpful if you intend to make extra repayments. However, it won’t alleviate the high exit fees incurred when selling or refinancing.

Frequently Asked Questions

What Is A Rate Lock?

A Rate Lock allows you to secure the initial offered rate, despite any subsequent changes made by the bank, between your loan application and advancement, for a fee ranging between $395 to $695 or 0.15% of the loan amount.

What is A Break Cost?

This is a fee levied by lenders when a borrower decides to pay off their fixed-rate home loan early or terminates their fixed-rate period.

Will Interest Rates Rise or Fall?

Predicting interest rate movements is inherently uncertain, and media speculations are not always reliable. Base your decision on solid economic understanding or personal preference, and refer only to official predictions made by reputable banks or government entities. Remember, shifting back to a variable rate from a fixed rate after a drop in interest rates entails hefty exit fees.

New Flexible Fixed Rates

Nowadays, some fixed-rate loans offer more flexibility and features like penalty-free extra payments, redraw facilities, 100% offset facilities, negligible or zero monthly account fees, and interest-only repayments.

Interest-In-Advance Home Loan

If you’re looking for valuable tax deductions this fiscal year, consider an interest-in advance home loan. This is especially suited for property investors and those looking to refinance. OzBroker can help you find lenders offering competitive rates and professional discounts.

Finding the Most Affordable Fixed Rate Home Loan

OzBroker uses specialised software to swiftly compare and find the most economical fixed-rate home loans.

Reach out to us at 0426667696 or inquire online. We’ll conduct a needs analysis, determine which lenders you’re eligible for, and present you with various fixed rate mortgage options to consider.

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