Last Updated: 29th September, 2023

When it comes to the term for a loan, borrowers in Australia have a decent number of options to choose from. A 10-year fixed interest rate is the longest tenure for an interest rate from most lenders. This can be an excellent option for borrowers who want the security of knowing their interest rate will not change for the 10-year term.

Why Should I Fix My Home Loan For 10 Years?

Peace Of Mind

History has shown us that financial meltdowns can happen with very little warning, often leaving those that are not prepared in precarious situations. So, if you are looking for stability and the ability to plan your finances well into the future, a 10-year fixed interest rate could be ideal for you.

Increasing Borrowing Capacity

High-net-worth investors or those on a fixed income may be unable to make the repayments on their loans if rates increase. By fixing the rate, you can often increase the amount that you can borrow as most banks consider you to be a lower risk.

Saving Money

Some people try to beat the market and lock in the ‘good times’ by fixing when mortgage rates are low. To do this effectively, you need to have a good understanding of the financial markets and the likely future of interest rates.

When Not To Fix For 10 Years

Not every person should fix their rate. A fixed rate is only suitable if your personal situation is unlikely to change in the future. A 10-year fixed rate will be unsuitable if you:
  • Are planning to make large lump-sum repayments.
  • Plan on selling the property in the first 10 years.
  • Require a flexible loan with features such as an offset account or a redraw facility.
Please discuss your needs with an expert mortgage broker; they can help you structure your mortgage in such a way that the lack of flexibility does not affect your future plans.

Which Bank Has The Lowest 10-year Rates?

Finding the cheapest fixed rate is not as simple as a quick Google search because most banks set their fixed mortgage rates weekly or fortnightly. The table below gives you a general idea by showing the best fixed interest rate and comparison rate currently available in the market:
Fixed Loan Term Interest Rate Comparison Rate* Contact Us
10 years fixed 7.49% 8.09% Apply Now
Here are three things you need to know about fixed-rate offers in Australia:
  • Fixed rate specials: Did you know that there are often specials on long-term fixed rates? Banks tend to offer specials on fixed-rate loans when they get access to a cheap source of long-term funding. Often this funding is only available to one lender, temporarily making them the market leader.
  • Lenders to choose from:Currently, only the big four banks are offering 10-year fixed interest rates.
  • Hidden conditions:How much extra are you allowed to pay each year? Is there a rate lock available? Can you do interest-only repayments for 10-year fixed investment loans? Mortgage brokers know the hidden rules of each lender and can quickly identify the most suitable loan for your situation.

If you are looking for the cheapest fixed-rate loans then please call us on 1300 889 743 or enquire online to speak to one of our fixed-rate mortgage brokers.

Who Fixes For Such A Long Term?

Professional Investors:Investors who have purchased a property that they intend to hold for the long term often lock in a 10-year interest-only fixed rate, which keeps the payments at a minimum and allows them to focus their attention on new investments. Larger property portfolios can easily be wiped out in a few years if the Reserve Bank increases rates. Investors with net assets over $5 million tend to prefer to fix part or all of their portfolios to protect themselves from market movements.

Conservative homeowners.: Older homeowners have seen plenty of economic meltdowns so tend to prefer fixed-rate loans. When a crisis hits, it is usually too late to fix and so many are forced to ride out the storm. By fixing when the economy is running smoothly, you can perhaps prevent future hardship.

Can I Have Features Such As Redraw And Extra Repayments?

Unfortunately, most fixed-rate loans have restrictions on making extra repayments, do not offer a 100% offset account, and have no redraw feature. Due to this, it is important to compare not just the interest rate, but also the additional features offered by the banks. In particular, some lenders have a restriction on the number of extra repayments during the fixed-rate term, whereas others have a per-year restriction. For a 10-year, fixed-rate loan it usually makes sense to go with a lender that has a per-year restriction. Decide which features you need and then discuss them with us so we can help you choose the most appropriate lender.

How Should I Structure My Loan?

Professional investors tend to structure their loan as a sole loan account that is fixed with interest-only repayments. This is because they have little need to make extra repayments, redraw or pay off the loan early. Homeowners tend to require more features and flexibility. Many choose to split their loan to be partly fixed and partly variable so that they can make extra repayments and redraw the variable portion. The fixed-rate portion of the loan is usually between 50% and 90% of the loan amount, depending on how much our customer believes they can repay during the first 10 years of the loan.

How Do I Apply For A Fixed-rate Loan?

Call us on 1300 889 743 or enquire online and one of our mortgage brokers will contact you to discuss your options.