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Flexible Fixed Rate Loan

The majority of Australian lenders, including most of the major banks, do not give you any bells and whistles with your fixed rate loan.

Features such as redraw, the ability to make extra repayments and offset accounts simply are not available.

You can have these features with your fixed rate loan, you just have to choose the right lender!

Making extra repayments

Not every lender is funded in the same way. In fact, in the USA it is actually the norm to be able to make extra repayments on your fixed rate loan. In Australia, there are only a handful of lenders that will allow you to make large extra repayments.

The lenders that do allow you this flexibility however have no restrictions at all for making extra repayments as long as you do not pay off the loan completely.

  • ANZ: $5,000 per annum OR 5% of the original loan amount, whichever is the lesser.
  • CBA: $10,000 p.a.
  • NAB: $20,000 during the fixed rate term.
  • St George: $10,000 p.a.
  • Rams: $30,000 during the fixed rate term.
  • Westpac: $30,000 during the fixed rate term.
  • Specialist fixed rate lender*: Unlimited as long as the loan account is not closed during the fixed rate term.
  • Specialist fixed rate lender 2*: Unlimited as long as the loan account is not closed during the fixed rate term

Please call us on 1300 889 743 or enquire online to discuss a fixed rate loan that allows extra repayments.

The above information about the major banks and other lenders is correct as at the time it was written. For specific information about how much you can repay off your current fixed rate loan please contact your lender. Both specialist lenders have competitive fixed rates similar to the major banks.

Fixed rate redraw

Why is it that most banks do not let you redraw your extra repayments during the fixed rate period? Again this relates to the way most banks are funded, when you make a payment to your loan they in turn pay off their funding source.

The end result is that they can’t let you get these additional repayments back by redrawing on your loan!

Again not every lender is funded in the same way! A couple of lenders on our panel will allow you to redraw during a fixed rate period, and will not even charge you a redraw fee.

Fixed rate 100% offset

The majority of lenders will only allow partial interest offset during a fixed rate period. This isn’t much help because the interest that is offset usually counts as an extra repayment and so they may even charge you break fees if you actually use their offset account. Home loans are not meant to be so complex!

Luckily some lenders can give you a 100% offset mortgage! You can enjoy all the benefits of a fixed rate with the flexibility of having an all in one transaction and offset account with ATM, cheque and credit card access.

Fixed rate line of credit

As unbelievable as it sounds, some of our lenders will even go as far as to offer a full line of credit (LOC) with a fixed rate loan.

You can fix for 1 year, 3 years or 5 years and enjoy all the benefits of having one simple loan account that can handle all your day to day banking. With some of these lines of credit you do not even need to make repayments as long as you are ahead with your loan.

Fixed rate construction loans

Yes, you can even build your new home and have a fixed rate. This goes against every restriction normally imposed on borrowers for fixed rate loans.

Since, construction loans are drawn down in stages the bank has to fund the loan in stages, which most banks simply cannot do. Some banks have set up clever funding programs which will allow them to give you a competitive fixed rate even for a construction loan.

So that is basically a "variable fixed rate"?

That’s right. These flexible fixed rates have all the features of variable loans, with the extra protection and security offered by fixed rate loans. For that reason we call them variable fixed rates.

What fixed terms are available?

Normal fixed rate terms of 1 year, 3 years or 5 years are available for 100% offset or a line of credit loan. However, 10 year and 15 year fixed rates are not available with this kind of flexibility. You can however get a construction loan for any fixed rate term of up to 15 years!

Free rate lock

Rate lock protects you in the event that the fixed rate loan you have applied for changes before your loan is advanced. This is a very real risk in a rising rate environment.

Did you know some lenders will waive the rate lock fee or have free rate lock on all their fixed rate home loans?

Is this a split loan?

A split loan is where part of your loan is fixed and part is variable.

This is not a split loan. It is a single loan account which has a fixed interest rate yet has the flexibility of a variable rate home loan.

How do I get the cheapest fixed rate?

Just give us a call on 1300 889 743 or enquire online and we’ll take care of the shopping around and paperwork for you. Best of all for most standard types of home loans our services are completely free!

  • Aaron Rex

    Rams and Westpac allow up to $30k in extra repayments during the fixed rate term, which I find quite suitable for me. The thing is though, I haven’t dealt with either of them before and so I want to learn a bit about them. Can you explain what their strengths and weaknesses are?

  • Hello Aaron, we have an entire section on our website where we have expert reviews on Rams and Westpac as well as a whole bunch of other banks and lenders all over Australia. You can learn about their strengths and drawbacks too. Here’s the link to our expert lender reviews section:

  • Chopper

    I would like to fix the rate on a construction loan but I don’t think my bank will allow fixed building loans. What can I do?

  • Hi Chopper,

    You can choose to build using a variable rate loan and then when construction is complete, you can lodge a variation request to fix your interest rate. The problem with this approach though is that if interest rates change while you’re building then you’ll need to accept the new rate. The other option is to apply with another lender that can allow you to fix the rate during construction.

  • Carol

    Hi, can you guys help me estimate the potential amount of break fees I may have to pay on a $473k loan that I fixed for 5 years?

  • Hey Carol,

    You can simply input your loan details into the fixed rate break costs calculator to find out how much break fees you may be charged. The calculator is very simple and straight-forward so you should have no problem adding in your info. Here’s the link to it: