5-year fixed rate home loan rates in Australia

Compare 5-year fixed rate home loans

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Name	Interest Rate p.a.	Comparison Rate p.a.	Fees	Monthly Payment
Ubank Flex Fixed Home Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupier	Interest Rate 6.74%	Comparison Rate 6.67%	Fees Application: $0 Ongoing: $250 p.a.	Monthly Payment $973	Go to siteMore Info Compare
Virgin Money Reward Me Fixed Rate Home Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupierMIn $300k	Interest Rate 6.79%	Comparison Rate 6.74%	Fees Application: $300 Ongoing: $10 per month	Monthly Payment $978	More Info Compare
Bank Australia Basic Fixed Home Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupier	Interest Rate 6.54%	Comparison Rate 6.40%	Fees Application: $595 Ongoing: $0 p.a.	Monthly Payment $953	More Info Compare
RACQ Bank Fixed Home Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupier	Interest Rate 5.74%	Comparison Rate 6.42%	Fees Application: $900 Ongoing: $0 p.a.	Monthly Payment $876	More Info Compare
Regional Australia Bank Partnership Advantage Fixed Home Loan Principal & Interest 5Y Fixed5% min. depositOwner-occupierOffset account	Interest Rate 6.14%	Comparison Rate 6.55%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $914	More Info Compare
Macquarie Bank Basic Fixed Home Loan Principal & Interest 5Y Fixed30% min. depositOwner-occupier	Interest Rate 6.19%	Comparison Rate 6.19%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $919	More Info Compare
HSBC Fixed Rate Home Loan Principal & Interest 5Y Fixed20% min. depositInvestment	Interest Rate 7.14%	Comparison Rate 7.51%	Fees Application: $600 Ongoing: $0 p.a.	Monthly Payment $1,013	More Info Compare
Macquarie Bank Offset Home Loan Package Fixed Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupierOffset account	Interest Rate 6.25%	Comparison Rate 6.46%	Fees Application: $0 Ongoing: $248 p.a.	Monthly Payment $925	More Info Compare
HSBC Fixed Rate Home Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupier	Interest Rate 6.99%	Comparison Rate 7.33%	Fees Application: $600 Ongoing: $0 p.a.	Monthly Payment $998	More Info Compare
ING Fixed Rate Home Loan Principal & Interest 5Y Fixed20% min. depositOwner-occupier	Interest Rate 6.39%	Comparison Rate 6.30%	Fees Application: $0 Ongoing: $299 p.a.	Monthly Payment $939	More Info Compare

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How do 5-year fixed rate home loans work?

• With any fixed rate home loan your interest rate won't change during the initial fixed period of the home loan. The fixed period is usually between 1 and 5 years.
• After that the loan reverts to a variable interest rate for the remainder of the loan. Most Australian home loans have 30-year terms and the majority of borrowers have variable rate home loans.
• A 5-year fixed rate loan is a relatively long time to fix your interest rate.

Other fixed rate periods

Most lenders offer fixed rates between 1 and 5 years. Learn more about different fixed periods with these guides:

• 1-year fixed rate loans
• 2-year fixed rate loans
• 3-year fixed rate loans
• 4-year fixed rate loans

What happens at the end of a 5-year fixed rate home loan?

Once the fixed period on a home loan ends the loan reverts to a variable interest rate. This will usually be a lower rate than the previous fixed rate.

You don't have to do anything when your 5-year fixed period is over. You just keep making repayments at the new rate.

But it's worth checking that you can't get a better rate, either from your current lender or by refinancing the loan.

Is it a good idea to get a 5-year fixed rate mortgage?

Most borrowers don't want to fix their rate for 5 years. It's too long. The interest rate is higher and the break fee is also quite high if you need to sell, refinance or pay off the loan early.

Why some borrowers fix for 5 years

• Your repayments won't change. Some borrowers value certainty and the ability to budget more than getting a lower rate.
• Forget about rate rises. You don't have to worry about rising interest rates and you can plan ahead.

Why most borrowers don't fix for 5 years

There are a couple of downsides to fixing for a long time that put off many borrowers:

5-year fixed loans have higher rates

Longer-term fixed rate loans have higher interest rates. 5-year fixed rate home loans are therefore the most expensive fixed rate options.

Compare some of the market's lowest rates and see how fixed and variable rates stack up.

Expensive break costs

Breaking a fixed rate loan early can cost your lender. That's why there's a break fee involved. Lenders calculate this cost based on various factors, including the amount of time remaining on your loan's fixed period.

This is why a 5-year fixed rate loan is riskier. By locking in your rate for so long a break fee is going to cost you much more, especially early in the loan.

Fewer loan features

Fixed rate home loans are less likely to come with the most useful mortgage features, such as:

• 100% offset accounts
• Extra repayments
• Redraw facilities

What kind of borrower is a 5-year fixed rate loan suitable for?

While less popular, there are some borrowers who might see value in locking in their rate for half a decade.

A 5-year fixed rate is suitable for borrowers who:

• Have fluctuating income or simply want to budget their repayments exactly and forget about changing rates.
• Are confident they won't need to sell their property or pay off the loan in the next few years.
• Think interest rates will continue rising for the next few years.

On that last point, it's pretty hard for the average borrower to time the market on rate rises. "You only ever fix it if it makes you feel more comfortable," says mortgage broker Josh Bartlett. "It's not about beating the banks."

A 5-year fixed rate is not suitable for borrowers who:

• Want the lowest interest rate
• Want to make extra repayments on their loan
• Want an offset account
• Want to pay off their loan early

Are 5-year fixed rate loans higher than variable rate loans?

Yes. 5-year fixed rate loans typically have the highest interest rates compared to other fixed rate loans and variable rate loans.

The cheapest interest rates on the market are all variable rate home loans.

You can see the current difference between fixed and variable rates on our average interest rates guide.

How do I compare 5-year fixed rate home loans?

To make sure you get a great deal on a 5-year fixed rate loan, pay attention to the rate, the fees and the loans' features.

Focus on the following:

Get a lower rate

Even if fixed rates are higher than variable rates, it's important to compare multiple 5-year fixed rates to find a good deal. Why pay more interest for no reason?

Get a loan with low fees

A lower interest rate is more important, but the lower the fees the cheaper the loan will be.

Loan features

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.

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Frequently asked questions about fixing your home loan rate for 5 years

• What is a good 5-year fixed interest rate?

  As of January 2024, the average 5-year fixed rate owner-occupier loan rate is 6.88%, according to Finder's database.

  The average across all fixed rate owner-occupier loans is lower at 6.72%.

• Can I make extra repayments on a 5-year fixed rate?

  Most fixed rate loans don't let you make extra repayments. Some do, but may charge an early repayment fee, while other loans limit the extra amount you can repay (usually to around $15,000 a year).

  If you want to pay off your loan faster, you should get a loan with an offset account or find a loan with unlimited extra repayments. This is probably a variable rate loan.

• Is now a good time to fix for 5 years?

  If your only concern is getting the lowest rate possible, you've missed your chance with a fixed rate. Rates have risen fast since 2022.

  This is true for all fixed rate loans, including 5-year fixed rates. If your reason for fixing is to get the lowest rate, you're better off going with a competitive variable rate loan.

• How do I know when interest rates are going to rise?

  It's hard for the average person to understand interest rate moves. Lenders and banks are largely free to set their own rates on home loans, but they are guided by the broader economy and how easy (and cheap) it is for them to borrow the money to fund home loans.

  The Reserve Bank of Australia (RBA) also plays a big role. The bank sets the official cash rate, which sets a benchmark for the cost of institutions to lend and borrow money. When the cash rate goes up, lenders raise variable interest rates for borrowers. But they also start to raise fixed rate loans for new customers.

  Follow Finder's monthly cash rate predictions to find out where the experts think rates are heading.

• What's a split rate home loan?

  A split rate loan allows you to divide your loan into fixed and variable rate portions. This means you can lock in 50% of your loan for 5 years and have the remaining 50% on a variable rate.

  A split rate lets you have the best of both worlds and is a way of hedging your bets if you're concerned about rate rises but still want the extra features and repayment options on a variable rate loan.