Fixed rate home loans
Lock in your repayments. Know the trade-off first.
A fixed rate home loan holds your repayments steady for a set term, so your budget doesn't move when rates do. For some buyers that certainty is worth it. For others the trade-offs aren't. We help you work out which one is you.
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How fixing works
What a fixed rate actually locks, and for how long.
Fixing means your interest rate, and so your repayments, stays the same for an agreed term, usually somewhere between one and five years. It doesn't move if the Reserve Bank lifts rates, and it doesn't move if lenders cut them. When the term ends, your loan rolls onto a variable rate unless you fix again. Here's the shape of it.
You lock the rate for a term
You choose a fixed term, commonly one to five years, and the lender holds your rate there for the whole period. Some lenders let you lock the rate in at application for a fee, so a rate move between approval and settlement can't catch you out.
Your repayments stay put
For the length of the term you pay the same amount on schedule, whatever happens to rates in the wider market. That predictability is the whole point: you can budget to the dollar, which matters most when money is tight, income is fixed, or you're a first home buyer finding your feet.
It reverts when the term ends
When your fixed period finishes, the loan usually switches to the lender's variable rate, often higher than the rate you were on, unless you fix again or refinance. This is the moment worth planning for well ahead, not the week it lands. We flag it early so the change never catches you out.
Is it for you
Fixing suits some situations and works against others.
There's no rule that says a fixed rate home loan is the right call, or the wrong one. It comes down to your plans, your income, and how you feel about risk. This is roughly where the line falls.
It probably isn't for you if
- You might sell or move within the next few years
- You expect a lump sum, like a bonus or inheritance, to throw at the loan
- You want a full offset account to park your savings against
- You want the freedom to refinance the moment a sharper deal appears
- You'd rather ride rates down if they fall
It tends to suit you if
- You want your repayments to hold steady for a set term
- A single income or a tight budget makes certainty matter more than flexibility
- A jump in rates would genuinely stretch you
- You are settled, with no plans to sell or refinance soon
- You don't need to make large extra repayments right now
The fine print
The catch: fixing trades away flexibility.
Certainty comes at a price. In exchange for a locked rate, most fixed loans ask you to give up some of the flexibility a variable loan gives you. None of this is a reason to avoid fixing. It's a reason to go in knowing the trade.
Breaking early can be expensive
If you repay, refinance, or sell during the fixed term, the lender can charge a break cost. It exists to recover the lender's loss when wholesale rates have moved against them, so it isn't a set fee: it can be small, or it can run into serious money, and you often can't know the figure until the day. This is the single biggest thing to understand before you fix.
Extra repayments are usually capped
Many lenders limit how much extra you can pay off a fixed loan each year before fees apply. If you are planning to hammer the loan down fast, a cap can get in the way, and it's one of the first things worth checking on any fixed product.
Offset is often limited or missing
A lot of fixed loans come with no offset account, or only a partial one, so savings you park alongside the loan may not cut your interest the way they would on a variable loan. If an offset is central to your plan, that's a real consideration.
You don't follow rates down
A fixed rate protects you if rates rise, but it also means you sit still if they fall. You're trading the chance of a lower repayment for the certainty of a known one. Whether that trade is worth it depends on where rates are headed, which nobody can promise.
Fixed, variable or split
Fixed isn't the only shape. It's one of three.
Most of the decision is really fixed versus variable, with a sensible middle option a lot of people forget. Here's the honest version of each before you pick.
Certainty, less flexibility
Your rate and repayments hold for the term. You're protected if rates climb, capped on extra repayments, and exposed to break costs if you leave early. It suits people who value a steady, known repayment above all else.
Flexibility, less certainty
Your rate moves with the market, up or down. You usually get a full offset, unlimited extra repayments, and the freedom to refinance without break costs, but your repayment can rise at any time. More on that on our variable rate home loans page.
A bit of both
You fix one portion of the loan and leave the rest variable, so part of your repayment is locked and part stays flexible. For a lot of borrowers it's the honest middle ground: some certainty, some room to move. See how a split rate home loan works.
Where we come in
Your bank offers its fixed rate. We weigh all three.
The real question isn't only whether to fix, it's which structure fits your plans and which lender's fixed terms are worth having. Some cap extra repayments hard, some allow an offset, some carry gentler break terms than others. We weigh fixed, variable and split across 30+ lenders, then a licensed broker recommends the one that fits your situation, not the one that pays us most.
Common questions
Fixed rate home loans, answered.
- Should I fix my home loan right now?
- There's no answer that's right for everyone, because it hangs on your situation more than on the market. If a steady repayment would take real pressure off, and you have no plans to sell or refinance soon, fixing can be a smart move. If you value flexibility or expect to pay a chunk off early, variable or split may serve you better. We talk it through against your actual plans, not a hunch about rates.
- Should I fix for 2 or 5 years?
- A shorter term keeps your options closer, so you can reassess sooner without a long commitment. A longer term buys certainty for longer, but it also widens the window where a break cost could bite if your life changes. The right length depends on how settled your plans are and how much certainty you want, which is exactly the kind of thing worth mapping out before you sign.
- What happens when my fixed rate ends?
- Your loan usually rolls onto the lender's variable rate, which is often higher than the rate you were fixed at. That makes the end of a fixed term a natural moment to review everything: refix, stay variable, or refinance elsewhere. We keep an eye on your expiry and reach out before it lands, so the change never catches you flat-footed.
- What are break costs on a fixed loan?
- A break cost is what a lender can charge if you exit a fixed loan early, whether by refinancing, selling, or paying it out. It's designed to cover the lender's loss when wholesale rates have shifted since you fixed, so it isn't a flat fee and can't be quoted with certainty up front. Sometimes it's minor. Sometimes it's substantial. It's the main reason to think hard about your plans before locking in a long term.
- Can I make extra repayments on a fixed rate home loan?
- Usually some, but not without limit. Most lenders cap how much extra you can pay each year on a fixed loan before fees apply, unlike a variable loan where you can generally pay as much as you like. If getting ahead fast matters to you, check the cap, or look at a split so part of the loan stays flexible.
- Can I have an offset account with a fixed rate loan?
- Sometimes, but often not, or only a partial offset. Full offset accounts are far more common on variable loans. If parking your savings against the loan to cut interest is important to you, that's worth weighing, and one reason some borrowers fix only part of their loan and keep the rest variable.
- Is a fixed or variable home loan better?
- Neither is better on its own, they solve different problems. Fixed gives you a repayment you can count on. Variable gives you flexibility and the chance to benefit if rates fall. Plenty of borrowers land on a split and take some of each. The right call is the one that matches your plans and how you handle risk, which is what a strategy session is for.
Good to know
Honest about break costs
We flag the exit costs up front
Before you fix, we make sure you understand what breaking early could cost and why it can't be pinned to a number in advance. Better to know now than to find out later.
Rates can move
No one can promise where rates go
Fixing is a way to manage that uncertainty, not remove it. We won't pretend to know the future. We help you make a sound call with what's known today.
In your corner
Free to you, and on your side
We're paid by lenders for introducing loans. Under the Best Interests Duty we're legally bound to recommend what suits you, not what pays us most.
Book a Free Strategy Session before you lock in.
A licensed broker tells you whether fixing fits your plans, and which lenders' terms are worth having. Nothing to prepare, no obligation.
15 to 30 minutes · no obligation · 30+ lenders