What is fixed-rate home loan?
A fixed-rate loan locks the interest rate for a chosen term, typically 1, 2, 3 or 5 years, so repayments don't move with the cash rate cycle until the term ends.
A fixed-rate home loan agrees an interest rate that doesn't change for a chosen term, commonly 1, 2, 3 or 5 years. Your repayment is identical month-after-month for the term, regardless of what the RBA cash rate does in the meantime.
Trade-offs: extra repayments are usually capped (commonly $10,000-$30,000 per year above the schedule), break costs apply if you exit before the term ends, and offset accounts are often unavailable or restricted on fixed products.
At the end of the fixed term the loan reverts to the lender's standard variable rate, which can be materially higher than the fixed rate. Borrowers should diary the rollover date well in advance to negotiate a new fixed period or refinance.
Also called
fixed rate · fixed home loan · fixed mortgage
Related
- Variable-rate home loan: A variable-rate loan moves with the lender's pricing decisions and the RBA cash rate cycle, so the rate (and your repaym…
- Comparison rate: Comparison rate is a statutory percentage that folds standard upfront and ongoing fees into the headline rate on a $150,…
- Rate lock fee: A rate lock fee is a one-off charge (commonly $395-$795) you can pay during loan approval to lock in today's fixed rate …
- Split loan: A split loan divides one mortgage into a fixed-rate portion and a variable-rate portion so you get certainty on part of …
General information only, not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.