Which lenders offer 5 year fixed rate home loans?

author-avatar By
on September 13, 2021
Which lenders offer 5 year fixed rate home loans?

Fixed-rate home loans can provide repayment certainty amid an ever-changing market, but could you commit to a five-year fix?

Five years. Half a decade. That's about the longest amount of time most mainstream lenders will allow you to fix your home loan for. There are a few lenders offering seven or 10-year fixed-rate home loans, but the higher interest rates hardly seem worth it.

Luckily, five-year fixed-rate home loans seem to dodge much of that, offering competitive market rates in lieu of repayment certainty. Many providers also offer them, meaning there's plenty to choose from.

Buying a home or looking to refinance? The table below features five-year fixed home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Fixed
More details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees

Own Home Loan Fixed (Principal and Interest) 5 Years (LVR < 80%)

  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
Fixed
More details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees

Package Fixed Rate Home Loan (Principal and Interest) 5 Years (LVR < 80%)

  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
Fixed
More details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees

Fixed Rate Home Loan (Principal and Interest) 5 Years (LVR ≤ 80%)

  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
Fixed
More details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees

Reward Me Home Loan Fixed 5 Years ($300k+) (Principal & Interest) (New Customer) (LVR < 60%)

  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
Fixed
More details

Fixed Options Home Loan (Principal and Interest) 5 Years (LVR < 70%)

    Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 29, 2022. View disclaimer.

    Pros and Cons of Five Year Fixed-Rate Home Loans

    There are a few considerations to make before jumping into a five-year fixed-rate home loan, including these benefits and drawbacks.

    Pros

    • Repayment certainty: As the name implies, fixed-rate loans fix the interest rate, which in turn fixes your repayment. This can help if you’re looking for cashflow certainty.

    • Weather any rate rises: Even a few basis points' difference to your home loan interest rate can add hundreds to your repayment, which can blow out the budget.

    • Lock-in at bottom of rate cycle: Rates are at or near historic lows, so the only way is up, right? If you lock in at the bottom, you won’t have to worry about any potential increases to your home loan on the horizon.

    Cons

    • Higher interest rates: Most of the competition in the fixed lending space has been in the 2-3 year range. While 5 year rates are still competitive, they are often around half a percentage point (50 basis points) dearer on the advertised rate than their 2-3 year fixed siblings.

    • Less flexibility: A fixed mortgage typically has more restrictions, including the ability to pay extra into the home loan. Banks and lenders typically cap extra repayments on fixed loans at $10,000 per year.

    • Break costs: One broker Savings.com.au spoke to once saw a client pay $35,000 in break fees to leave their fixed home loan. This is a fee calculated based on the lender’s wholesale funding costs. The longer you have to go on your fixed period - and the more you’ve borrowed - the greater your break fee is likely to be.

    The market is awash with competitive five-year fixed loans, just make sure you do your research before deciding if fixing is right for you, your budget, and your home loan goals.


    Photo by Advocator SY on Unsplash

    Disclaimers

    The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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    author-avatar
    Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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