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RBA hikes again: Is it time to lock in your home loan?

With a December interest rate hike also on the cards, here are the cheapest fixed home loan rates.

Yesterday’s interest rate rise possibly has you wondering: should I lock in my home loan?

Many economists and experts now say we may see another interest rate rise next month and are talking about interest rates that will be ‘higher for longer’. So, fixing your home loan interest rate may suddenly be under consideration.

Mozo has revealed the cheapest product available for fixing your home loan interest rate for one, two, three, four, or five years.

You can see that owner-occupiers can pay just 5.48 per cent over one year with Macquarie Credit Union, 5.49 per cent for two years with South West Slopes Credit Union and 5.48 per cent over three years with Australian Mutual Bank.

Compilation of symbols of banks giving the cheapest fixed rate home loan: Macquarie Credit Union, Australian mutual bank, Qudos Bank, tictoc and IMB bank
Fixed-rate home loans are available for as low as 5.48 per cent. (Source: Yahoo Finance Australia) (Samantha Menzies)

Interestingly, the lowest rate you can get over four years ticks up to 5.84 per cent – that’s those ‘higher for longer’ rate forecasts. It’s from Qudos Bank. Then, a lower 5.59 per cent is available from RACQ Bank over five years.

Australia's cheapest fixed-rate home loans

Cheapest one-year fixed rates

Lender

Home Loan

1-Year Fixed Rate

Comparison Rate

Macquarie Credit Union

Fixed Rate Home Loan

5.48%

7.89%

The Capricornian

Fixed Premium Choice Home Loan

5.75%

6.90%

Pacific Mortgage Group

Fixed Home Loan

5.89%

5.57%

Homeloans360

Fixed Home Loan

5.89%

5.62%

Bank Australia

Basic Home Loan

5.89%

5.81%

Source: mozo.com.au as at November 6, 2023, leading one-year fixed rates for owner occupier, principal and interest home loans at $400,000, 80 per cent LVR

Cheapest two-year fixed rates

Lender

Home Loan

2-Year Fixed Rate

Comparison Rate

South West Slopes Credit Union

Optimum Fixed Rate Home Loan

5.49%

6.18%

Macquarie Credit Union

Fixed Rate Home Loan

5.51%

7.63%

Australian Mutual Bank

Fixed Rate Home Loan

5.63%

6.19%

Police Bank

Police Value Home Loan

5.69%

6.09%

Greater Bank

Great Rate Home Loan

5.79%

6.16%

Source: mozo.com.au as at November 6, 2023, leading two-year fixed rates for owner occupier, principal and interest home loans at $400,000, 80 per cent LVR

Cheapest three-year fixed rates

Lender

Home Loan

3-Year Fixed Rate

Comparison Rate

Australian Mutual Bank

Fixed Rate Home Loan

5.48%

6.10%

South West Slopes Credit Union

Optimum Fixed Rate Home Loan

5.49%

6.11%

Easy Street

Fixed Home Loan

5.69%

5.80%

Qudos Bank

Fixed Rate Home Loan

5.69%

5.91%

Community First Bank

Accelerator Fixed Home Loan

5.69%

6.14%

Source: mozo.com.au as at November 6, 2023, leading three-year fixed rates for owner occupier, principal and interest home loans at $400,000, 80 per cent LVR

Cheapest four-year fixed rates

Lender

Home Loan

4-Year Fixed Rate

Comparison Rate

Qudos Bank

Fixed Rate Home Loan

5.84%

5.94%

Up

Home Fixed Rate

5.90%

5.90%

Tic:Toc

Fixed Home Loan

5.98%

5.83%

BCU Bank

Fixed Rate Home Loan

5.99%

5.96%

IMB Bank

Fixed Home Loan

5.99%

6.18%

Source: mozo.com.au as at November 6, 2023, leading four-year fixed rates for owner occupier, principal and interest home loans at $400,000, 80 per cent LVR

Cheapest five-year fixed rates

Lender

Home Loan

5-Year Fixed Rate

Comparison Rate

RACQ Bank

Fixed Home Loan

5.59%

6.22%

Australian Mutual Bank

Fixed Rate Home Loan

5.63%

6.05%

Qudos Bank

Fixed Rate Home Loan

5.84%

5.93%

Bank Australia

Basic Home Loan

5.89%

5.86%

Police Bank

Police Value Home Loan

5.94%

6.10%

Source: mozo.com.au as at November 6, 2023, leading five-year fixed rates for owner occupier, principal and interest home loans at $400,000, 80 per cent LVR

My three vital rules for fixing your home loan

Rule 1: Only ever fix if you can get a fixed rate below the equivalent variable one

You are winning immediately that way and, even if rates subsequently fall, at least you have started ‘ahead’. Mozo says the average variable rate on its database is currently 6.62 per cent (based on a $400,000 loan at 80 per cent loan-to-value ratio, owner-occupier repaying principal and interest). So those fixes above tick that box – while they last. Lenders have been frantically repricing as expectations of more increases grow.

Also by Nicole Pedersen-McKinnon:

And don’t forget the variable rate will likely, imminently be up 25 basis points. In fact, most are lower than the cheapest-quality variable-rate product on the market (with a real offset account): 5.69 per cent from Bendigo Bank-backed Tic:Toc.

Rule 2: Only ever fix if interest rates are expected to go up

This is a tricky one. Only a month ago, they were expected to go down. Everyone can get it wrong – even the governor of the Reserve Bank of Australia. Which is why…

Rule 3: Only ever fix half your home loan

This is like having a bet each way. And during the Spring Racing carnival, that’s just smart money.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter and Instagram.

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