Fixed Rate Home Loans Lock In Your Rate & Budget With Confidence
Protect yourself from interest rate rises. Compare fixed rate home loans from 32+ lenders. Lock in your rate for 1-5 years and enjoy payment certainty.
What Are Fixed Rate Home Loans?
A fixed rate home loan locks in your interest rate for a set period (typically 1-5 years), giving you predictable repayments and protection against rate increases during the fixed period.
Rate Certainty
Your interest rate stays the same for the entire fixed period, regardless of market changes or RBA cash rate decisions.
Budget Confidence
Fixed repayments make budgeting easy. You know exactly how much to pay each month for the duration of the fixed term.
Protection from Rises
If the RBA raises rates or lender rates increase, your repayments stay the same. This can save thousands if rates rise significantly.
Flexible Terms
Choose from 1, 2, 3, 4, or 5-year fixed terms. Some lenders even offer 7 or 10-year fixed options for ultimate security.
Split Loan Options
Many borrowers split their loan—fix part for security and keep part variable for flexibility and offset benefits.
Competitive Rates
Fixed rates are often competitive with variable rates, especially during uncertain rate environments. We compare 32+ lenders daily.
January 2025 Rate Environment
With inflation concerns and potential RBA rate decisions ahead, many borrowers are locking in fixed rates for certainty. Current 3-year fixed rates are competitive with variable rates.
*Rates current as of January 2025. Actual rates vary by lender, LVR, and loan amount.
Fixed Rate vs Variable Rate
Understanding the key differences helps you choose the right loan structure for your situation.
Fixed Rate Loans
Lock in your rate for 1-5 years
✓ Advantages:
- Payment certainty: Same repayment every month
- Protected from rises: Rate increases don't affect you
- Easy budgeting: Predictable expenses
- Peace of mind: No stress about rate changes
- Competitive rates: Often similar to variable
⚠ Considerations:
- Can't benefit if rates fall significantly
- Limited extra repayments (typically $10-30K/year)
- Break fees apply if you exit early
- Usually no offset account available
- Less flexibility to refinance during term
Variable Rate Loans
Rate changes with market conditions
✓ Advantages:
- Benefit from cuts: Rate decreases = lower repayments
- Offset accounts: Save interest on everyday savings
- Unlimited extras: Pay off faster without penalty
- Full flexibility: Redraw, refinance anytime
- No break fees: Switch or sell without penalties
⚠ Considerations:
- Exposed to rate rises
- Repayments can increase unexpectedly
- Harder to budget with changing repayments
- Uncertainty in volatile rate environments
- May pay more over time if rates trend upward
Split Loan Strategy: Best of Both Worlds
Many savvy borrowers split their loan 50/50 or 60/40 between fixed and variable. This gives you rate protection on part of your loan while maintaining flexibility and offset benefits on the rest.
Example Split:
- $300K fixed @ 5.94% (3 years)
- $300K variable @ 6.10% (offset)
- Total loan: $600K
- Protected yet flexible
Benefits:
- 50% rate certainty
- Offset on variable portion
- Can make extras on variable
- Balanced risk approach
Which Fixed Term Should You Choose?
The right fixed term depends on your rate outlook, life plans, and risk tolerance.
1-Year Fixed Rate
✓ Best For:
- Short-term rate protection
- May sell/refinance within 1-2 years
- Expect rates to fall after 12 months
- Want to lock in current low rates briefly
📊 Typical Rate:
Usually the lowest fixed rate option, often 5.89-6.09% currently. Provides immediate certainty without long commitment.
2-Year Fixed Rate
✓ Best For:
- Medium-term stability
- Uncertain rate environment
- Balance between security and commitment
- Popular "Goldilocks" option
📊 Typical Rate:
Competitive rates around 5.94-6.14%. The sweet spot for many borrowers—not too short, not too long.
3-Year Fixed Rate ⭐ Most Popular
✓ Best For:
- Maximum certainty at competitive rates
- Long-term owner-occupiers
- Growing families needing budget stability
- Most lenders offer best rates at 3 years
📊 Typical Rate:
Often the best value fixed rate at 5.94-6.19%. Lenders compete heavily in this space, making it the optimal choice for most.
4-5 Year Fixed Rate
✓ Best For:
- Maximum long-term security
- Expect significant rate increases ahead
- Tight budget with no room for increases
- Planning major life changes (maternity, career)
📊 Typical Rate:
Slightly higher at 6.09-6.39% due to longer commitment. Worth it if you strongly believe rates will rise and stay high.
Understanding Break Fees
One of the most important aspects of fixed loans is understanding what happens if you need to exit early.
What Are Break Fees?
Break fees (also called break costs or economic costs) are charges you may incur if you exit your fixed rate loan before the fixed period ends. This includes refinancing, selling your property, or paying off the loan.
How Break Fees Are Calculated:
Break fees compensate the lender for the difference between your fixed rate and current wholesale rates. The calculation is complex but generally:
- If rates have risen: Break fee may be $0 or minimal (you're on a cheaper rate than they can get now)
- If rates have fallen: Break fee can be substantial (lender loses money as they locked in your higher rate)
Example Break Fee Scenario:
Original loan: $500K @ 6.0% fixed, 3 years remaining
Current market rate: 5.0% (1% lower than your rate)
Estimated break fee: $12,000-$18,000
The lender must refinance your money at 5% but locked you in at 6%, so they charge you for the lost interest over the remaining term.
❌ When You Pay Break Fees
- Refinancing to another lender
- Selling your property
- Paying off loan in full
- Exceeding extra repayment limits
- Switching to variable early
- Restructuring your loan
✓ How to Avoid/Minimize Them
- Wait until fixed period ends
- Choose split loan (only fixed portion charged)
- Stay within extra repayment limits
- Port your loan if moving (some lenders)
- Time refinance when rates have risen
- Negotiate with lender in hardship
💡 Pro Tips
- Ask lender for break fee estimate before fixing
- Consider portability if you may move
- Split loan = more flexibility
- Set calendar reminder 6 months before end
- Start shopping 3 months before end date
- Some lenders waive fees in hardship
Fixed Rate Loan FAQs
Can I make extra repayments on a fixed rate loan?
Yes, but with limits. Most lenders allow $10,000-$30,000 in extra repayments per year without penalty. Anything above this may incur break fees. The exact limit varies by lender—some allow $10K, others $20K, and some have no extra repayment facility at all. If you plan to make large extra repayments, consider a split loan or variable rate instead.
Can I get an offset account with a fixed rate loan?
Rarely. Most lenders don't offer offset accounts on fixed rate loans. A few lenders (like St George and Bank of Melbourne) offer 100% offset on certain fixed products, but they're exceptions. If offset is important to you, consider a split loan—fix part for certainty and keep part variable with full offset. This gives you the best of both worlds.
What happens when my fixed rate period ends?
When your fixed period ends, your loan automatically reverts to the lender's standard variable rate unless you take action. This revert rate is usually much higher than competitive rates (often 1-2% above market). You should start shopping for new rates 3-6 months before your fixed period ends. You can refinance to another lender, negotiate a new fixed rate with your existing lender, or switch to their variable rate.
Should I fix now or wait for rates to drop?
This is the million-dollar question and depends on your rate outlook. If you believe rates will rise or stay elevated, locking in now provides certainty. If you expect significant rate cuts soon, you might be better on variable short-term. However, nobody can predict rates with certainty. Many borrowers split their loan 50/50 to hedge both scenarios—you're protected if rates rise but can still benefit if rates fall on the variable portion.
Can I fix an investment property loan?
Absolutely. Fixed rates are available for both owner-occupied and investment properties. Investment fixed rates are typically 0.1-0.3% higher than owner-occupied fixed rates. Many investors fix their investment loans to create predictable cash flow and make budgeting easier, especially if the property is negatively geared. Tax-wise, the interest is still fully deductible whether fixed or variable.
What's the difference between a fixed rate and a rate lock?
A rate lock (or rate hold) is when you secure a specific fixed rate before settlement, typically for 90 days. This protects you from rate increases during the application and settlement period. Once settlement occurs, the fixed rate period begins. For example, if you rate lock at 5.94% for 3 years and settlement takes 60 days, your actual 3-year fixed period starts from settlement date. Rate locks are free with most lenders and highly recommended in rising rate environments.
Can I switch from variable to fixed during my loan?
Yes, most lenders allow you to convert from variable to fixed at any time without penalty. You'll simply need to contact your lender and request to fix your rate. The rate you get will be the current fixed rate at that time, not the rate you originally qualified for. This is a common strategy—start on variable, and if rates start rising or you want more certainty, convert to fixed. The opposite (fixed to variable before the term ends) usually incurs break fees.
How much can I save with a fixed rate loan?
This depends entirely on what happens to rates after you fix. If you fix at 5.94% for 3 years and variable rates rise to 7%, you could save $6,000+ per year on a $500K loan—that's $18,000 over 3 years. However, if rates fall to 5%, you'd potentially "lose" about $5,000 per year by being locked in. The value of fixed rates isn't just financial—it's also the peace of mind and budget certainty, which many borrowers value even if they end up paying slightly more.
How We Help You Find the Best Fixed Rate
We monitor fixed rates across 32+ lenders daily and help you lock in the best rate for your term and situation.
Daily Rate Monitoring
We track fixed rates across 32+ lenders every day. When rates drop or lenders offer specials, we'll find you the best deal.
Fixed vs Variable Analysis
We'll run scenarios showing your repayments under different rate movements, helping you decide if fixed or split is right for you.
Rate Lock Timing
We'll advise when to lock in your rate to maximize your rate hold period and protect you from increases during settlement.
Split Loan Structuring
We'll help you determine the optimal split ratio and which lenders offer the best combined fixed + variable rates.
Fixed Period Reminders
We'll remind you before your fixed period ends so you can refinance and avoid high revert rates. Never get stuck on standard variable.
Break Fee Avoidance
We'll help you understand break fees upfront and choose lenders with fair break fee policies and portability options.
Lock In Your Rate Today
Compare fixed rates from 32+ lenders and secure payment certainty for your home loan. Get expert advice on whether to fix, split, or stay variable.