A 2-year fixed rate home loan is like any other home loan: you borrow money and repay it over the loan term. The only difference is your interest rate won't move at all for the first 2 years of the loan.
After that, your loan reverts to a variable rate loan. Variable interest rate home loans can change at any time as lenders respond to changes in money markets and the overall economy.
Most lenders offer fixed rates between 1 and 5 years. Learn more about different fixed periods with these guides:
Not too long ago 2-year fixed rate loans were some of the lowest interest rates on the market. For a period in 2021 they were sometimes even lower than the most competitive variable rate loans.
But that's not the case now. Interest rates on all mortgages have risen because of rising inflation and the Reserve Bank's (RBA) decision to lift rates in response.
Variable rates have jumped up, and lenders have set their fixed interest rates even higher. This is the normal situation for fixed rates.
You should consider fixing your rate if you want to forget about rate rises and enjoy knowing exactly how much you should budget on mortgage repayments each month.
But if you're trying to lock in the lowest rate on the market, that ship has sailed. If you want the lowest possible rate, you might be better off with a variable rate (even if rates are going to rise further).
You can see the current difference between fixed and variable rates on our average interest rates guide.
To make sure you get a great deal on a 2-year fixed rate loan, pay attention to the rate, the fees and the loans' features.
Focus on the following:
If you decide you want a 2-year fixed rate, compare your options to find a lower one. Why pay more interest for no reason?
When some loans come with multiple fees and others almost none, a low-fee loan is a no-brainer.
A lower interest rate is more important, but low fees are another way to save on your loan costs.
Fixed rate loans have fewer features than variable rate loans, like 100% offset accounts or the ability to make extra repayments. But some do, so it's worth comparing.
But even if a 2-year fixed rate lacks these features, you'll be on a variable rate in 24 months. Then the loan will give you more features and repayment options.
Owner-occupiers and investors both have plenty of options if they want to lock in a fixed rate.
Examples of specific fixed rate home loan types include:
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I paid the rate lock fee for an Anz 2yr fixed home loan on august 12th this year and now the loan has been approved they cannot find what the rate was on August 12th 2022 – where do I look to see what the 2 yr fixed home loan rate was in August before the last few rate hikes … all internet searches just show current rates and I dont want to get stung with a higher rate than what it was back then many thanks Stacey
Hi Stacey,
It is best to contact ANZ directly. They should have a record of the rates they previously offered.
Kind regards,
Rebecca