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5 Year Fixed Rate

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.