Who has the lowest 5 year fixed rate?

Getting the best fixed rate is as simple as browsing the internet for the lowest advertised rates right?

Actually, many major lenders offer discount packages on their fixed rate loans that can only be negotiated.

For this reason, most people use a mortgage broker to help them find the lowest rate on their 5 year fixed home loan.

Please call our mortgage brokers on 1300 889 743 or enquire online to find out which interest rate discounts you are eligible for.

Different banks, different rates

Unlike with variable rates where most major banks tend to match each other, fixed rate loans rates tend to vary between the banks. This is because fixed rates change every few weeks.

So, it is easier for the banks to get away with playing tricks with the pricing of their loans. Also, the economists working for each of the banks have different opinions as to the likely direction of interest rates in the future.

As a result, the major banks have large differences in their 5 year fixed rates!

Why is it better to fix for 5 years?

Choosing when to fix your rate and for how long isn’t an exact science. Unfortunately, we can’t predict the likely future of interest rates, so you can only use an educated guess to work out if now is the right time for you to lock in your repayments.

You should fix for 5 years if you believe that rates are likely to be higher than they are now for the medium term. The other time that you should fix your loan is if there is a high likelihood that a spike in your repayments will push you over your limit.

When is it not a good time to fix?

Try to avoid fixing your rate during times of economic volatility. The banks tend to increase their fixed rates in an attempt to cash in on peoples fear!

The best time to fix is during the “calm before the storm”, which of course is easy to see with hindsight, but nearly impossible to predict in reality. Fix when the market is stable, to protect yourself when the market is unstable.

If the market is already unstable, fixing your rate should be considered as “damage control”.

When is a 5 year fixed home loan not suitable for me?

Of course, not everybody should fix their rate. A 5 year fixed rate would be unsuitable for you if:

  • Are planning to make significant extra repayments on your loan.
  • Believe that you may sell your property.
  • Need a flexible loan such as a line of credit or 100% offset facility.

How can I apply for a fixed rate loan?

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

  • Cooper

    How do I calculate the break costs of the 5 year fixed rate?

  • Hi Cooper,

    Unfortunately lenders do not have a standard process for calculating break costs for a fixed loan, as it changes on a daily basis, and take into consideration things like current economic market, the remaining term of your fixed loan, the loan size and the current fixed rate for the same term. You can request the approximate break cost by giving a call to your bank.

  • Kade

    I’ve decided on fixing my loan for at least 5 years but I’m not sure if I will be allowed to borrow $1.5-2 million on a 95% loan. Can this be done?

  • Most lenders will only approve a 95% mortgage for up to $700k – $800k. Some less conservative lenders can allow you to borrow up to $1 million. However, the lender’s mortgage insurers have restrictions which will stop you from borrowing over $1 million. One of our lenders has a special agreement with their insurer and can consider a 95% loan up to $2.5 mils for people who are in an exceptionally strong financial position. Please call 1300 889 743 if you’d like to discuss this with an expert mortgage broker.

  • Eleanor

    What’s the difference between a capped rate vs a fixed rate?

  • Hi Eleanor,
    If you get a fixed rate home loan, it does not matter if rates go high or low, your interest rate will remain the same. Therefore, you are both protected and are unable to benefit from low interest rates. A capped rate loan, on the other hand, can move up or down depending on existing rates. However, if there is a substantial increase in rates no matter how high, you are protected and your rate cannot go over the agreed cap. You can also make substantial additional repayments to a capped rate loan, this means that a capped rate offers more flexibility than a fixed rate loan.

  • Cynthia JJ

    Is there a fee that we need to pay for the capped rate?

  • Yes, as with a fixed rate loan, there is usually a rate lock fee or equivalent. This fee is usually 0.15% of the loan amount at the time the loan is advanced to you.

  • James C

    I wanted to borrow in the name of my company but I was referred to business banking. Is this normally the process?

  • Hey there,
    It’s best to avoid that at all costs because if you have a residential property as security then you have no need to pay more in interest and fees. Some of ur lenders can approve company home loans and trust home loans at standard residential rates although you may have to pay slightly higher fees. Please call our office if you’d like to discuss this with an expert mortgage broker.

  • Lailaa

    I have a mortgage fixed with AMP for 5 years. I want to refinance it with another lender. How do I calculate the break costs of a fixed rate?

  • Hi Lailaa,
    You can use our mortgage break fees calculator to estimate your home loan break costs https://www.homeloanexperts.com.au/fixed-rate-loans/break-cost-calculator/. Please note that the fees may vary with each lender so you should ask them for the actual figure.