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 on a weekly or fortnightly basis.

As a mortgage broker, we can almost always offer a far superior fixed rate to that offered by your current bank for several reasons:

  • 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.
  • More lenders to choose from: Some lenders tend to be better than others for fixed rate loans. Some lenders such as ANZ actively discourage fixed rate lending by not offering competitive rates. Bank managers can rarely if ever offer the discounted 10 year fixed rates offered by the current market leader.
  • Hidden conditions: How much extra are you allowed to pay each year? Is there rate lock available? Can you do interest only repayments for 10 year fixed investment loans? We 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 loan then please call us on 1300 889 743 or enquire online to speak to one of our fixed rate mortgage brokers.

Why fix for 10 years?

10 years is one of the longest terms available for fixed rates in Australia. So why do people choose to fix for such a long period of time?

  • 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.
  • 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: By fixing when mortgage rates are low some people try to beat the market and lock in the “good times”. Of course to do this effectively you need to have a good understanding of the financial markets and the likely future of interest rates.

Who fixes for such a long term?

Professional Investors: Investors that 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 portfolio to protect themselves from market movements.

Conservative home owners.: Older home owners 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 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 have 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 amount 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, to redraw or to pay off the loan early.

Home owners tend to require more features and flexibility. Many choose to split their loan to be part fixed and part variable so that they can make extra repayments and redraw on 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.

Avoiding the potential problems

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 our mortgage brokers, that way they can structure your mortgage in such a way that the lack of flexibility does not affect your future plans.

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.

  • Brooklyn

    The concept of fixing the rates seems good however the break costs are so appalling. Will the lenders communicate the break costs earlier or is there a formula to calculate the costs?

  • Hi Brooklyn,

    You can request the approximate break cost by giving a call to your bank. Lenders do not have a standard process for calculating break costs for a fixed loan, as it changes on a daily basis.

    However they consider various things like current economic market, the remaining term of your fixed loan, the loan size and the current fixed rate for the same term and should be able to give a figure to you. As it may vary with the lenders there isn’t a specific formula to calculate the cost.

  • Hay

    Aside from the first home owner grant, are first home buyers eligible for any other relevant discounts?

  • Hey Hay.
    Yes, the state governments offer a range of stamp duty exemptions, additional grants and other benefits that can help you buy your first home. We recommend that you refer to your state government first home buyer website for the full details. If you’re not sure what benefits you may receive, we recommend that you call your state’s first home buyer hotline.

  • Fellers

    Isn’t there any easier way than this? I just need an estimate to do some planning and clear a few things.

  • Hi Fellers,
    Well, a simpler method is by inputting your loan details into the break cost calculator to get an estimate of your mortgage exit fees. The instructions as well as some additional info are on the page itself. Here’s the link:

  • farrelly

    Is a commercial showroom considered specialised property?

  • Hey farrelly,
    Showrooms are largely cnsidered to be in the same category as warehouses, meaning they are mainly considered to be standard commercial properties. However, if it’s purpose-built like a car showroom or has speacialty-built loading docks, you may find it tougher to get approved.

  • Suzanne

    How much can we borrow to buy a commercial showroom?

  • You can generally borrow up to 70-75% of the property value to buy a freehold showroom. However, by using a residential property as security or with a guarantor, you can borrow up 105% of the property value. Please check out the showroom commercial loan page if you’d like to learn more:

  • Stokes

    I’m a professional investor and have all my mortgages fixed for higher time periods. Are banks still offering 10 or more year fixed rate mortgage?

  • Hi Stokes,
    Unfortunately, 15 or more year fixed rate home loans don’t exist anymore. However, some of our lenders offer 10 year and 5 year fixed rate home loans. Still, if you want to fix your mortgage for 15 years, you can choose 10 years fixed term now, and then extend your fixed rate by 5 years at the end of the fixed term. However, this will depend upon the bank’s policy at that time. Please call us on 1300 889 743 to get a quote from one of our mortgage brokers.

  • Ranveer

    Hi there, I’m trying to estimate the break cost if I refinance my 3-year fixed term with NAB with 1 year still remaining. Can you help?

  • Hi Ranveer,
    Banks don’t always disclose their break fees or reveal how it’s calculated. It is best to contact your lender NAB and ask for an exact figure. Every bank has its own calculation for exit fees and uses the change in wholesale interest rates to do so. It also takes into account the remaining fixed loan term period. To get an estimate of your home loan exit fees you can use our break costs calculator: https://www.homeloanexperts.com.au/fixed-rate-loans/break-cost-calculator/