Are 30 year fixed rate home loans available?
No, there are no lenders in Australia that offer 30 year fixed rates for standard residential home loans.
Are 20 year fixed rate home loans available?
No, there are no lenders in Australia that offer 20 year fixed rates for standard residential home loans.
What is the maximum fixed rate term?
Don't worry, you can still fix for 15 years or 10 years and the interest rates being offered are usually similar to the current variable rates. If you fix for 15 years you can then extend your fixed rate for another 15 years at the end of the fixed term, effectively giving yourself a 30 year fixed rate. Be careful because when you re-fix the rate you will have to negotiate with your bank and accept the rate that they are offering at that time. If their rate is no longer competitive at that time you can refinance to a bank with a better offer.
How do you find the cheapest long term fixed rate?
The best way to find a cheap long term fixed rate is to speak to a mortgage broker and let them shop around for you. We specialise in finding our customers the best interest rates and can let you know which banks are willing to discount their rates below those advertised on their websites.
Lenders tend to update their fixed rates & comparison rates on a regular basis so there are no single websites that have up to date information that covers all the bank and non-bank lenders.
Why don't Australian banks offer 30 year fixed rates?
Because of the way our banks are funded and the regulations imposed on our banks it is a very high risk for them to offer longer term fixed rates. Their exposure to financial meltdowns and economic downturns is multiplied by offering longer term fixed rates. Because of this few banks will offer anything longer than 5 years. A few banks have 10 year or 15 year fixed rate terms but none will offer longer than this.
What do I need to consider before fixing my rate?
Before you lock your rate in you need to be sure that a fixed rate loan is suitable for your situation. Long term fixed rates tend to suit buy and hold investors more than people buying a house to live in.
- Will you sell the property? Selling the property during the fixed rate term is a bad idea! Australian lenders impose hefty fees for breaking a fixed rate contract. By selling the property you repay the loan, and so are slugged with a large fee which can often be over $10,000!
- Will you make extra payments? Fixed rate loans tend to have restrictions making more than ten or fifteen thousand per year in extra repayments. If you pay more than that you may incur break fees.
- To rate lock or not to rate lock? When you apply for a fixed rate loan you have the option of locking in the interest rate. For a small fee you can protect yourself from changes in the money market that may alter the fixed rate offered by your bank between the time of filling in an application and the time when your loan account is opened. Otherwise you will get the (possibly higher) rate at the time of settlement, not the time of applying.
- Features, bells & whistles. Fixed rates are renowned for having even less features than a basic loan. This means that 100% offset, redraw, line of credit accounts and repayment holidays are usually completely absent. Features such as interest only repayments and professional package discounts can still be obtained with a fixed rate. By taking a loan that is part fixed part variable you can get all the features without losing your protection from rate movements.
How do I apply for a long term fixed rate home loan?
Don't hesitate to contact us or enquire online about the fixed rate loans suitable for your situation. Unfortunately 20 year fixed rates and 30 year fixed rates are not available, however we can show you which lenders have competitive 15 year fixed rates.
