Which banks and lenders offer home loans fixed for seven years?

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on June 09, 2022 Fact Checked
Which banks and lenders offer home loans fixed for seven years?

Many home loan lenders max-out their fixed-rate periods at five years. But there are a few that offer 7-year fixed rates.

With interest rates rising, many lenders have moved fixed rates sharply north. This creates a catch-22 of sorts where many borrowers might be wondering if they should lock-in for a longer length of time to weather any more rate rises.

With the RBA slated to raise the cash rate target to more than 2.00%, who knows what home loan rates could look like in a few years' time. That said, for borrowers looking to lock in a home loan fixed rate for longer than five years, the options are limited.

In Savings.com.au’s market research, there were just three lenders offering 7-year fixed rates at the time of writing:

The table below features seven-year fixed home loans for both owner occupiers and investors.

Lender

Fixed
More details

Fixed Rate Home Loan (Principal and Interest) 7 Years

    Fixed
    More details

    Fixed Rate Home Loan (Principal and Interest) 7 Years (LVR < 80%)

      Fixed
      More details

      Fixed Rate Investment Loan (Principal and Interest) 7 Years (LVR < 80%)

        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 April 22, 2022. View disclaimer.

        Advantages of a seven-year fixed-rate home loan

        1. Repayment certainty

        Repayments won’t fall or rise during the time of your fixed period, giving you repayment certainty. With variable-rate home loans, there’s nothing stopping you from refinancing regularly, but there are often costs in doing so, which can add up to thousands of dollars.

        2. Find your feet

        The stability of a fixed-rate home loan, if you’re a first home buyer, allows you to get used to paying off the mortgage without worrying about the repayment changing. This allows you to work the mortgage better into your budget, which can be tough enough to manage without the rates going up.

        3. Lock-in before rates rise

        Locking-in a rate for seven years can mean you weather any rate rises in that time. The same goes for rate decreases however - you won’t get the benefits of that.

        4. Consider a split

        Split home loans keep some of the loan variable, and some of it fixed. This gives you flexibility and some repayment certainty at the same time. With the variable portion, you can often get an offset or redraw account, and pay extra into the home loan.

        Disadvantages of a seven-year fixed-rate home loan

        1. Higher interest rates

        Fixed mortgage rates are typically moving upwards at a faster rate and are more expensive than variable-rates. At the time of writing, even some of the more competitive seven-year fixed loans had rates triple some of the lowest variable rates on the market, as seen in the table below. Fewer lenders also means less competition, which theoretically means less incentive for lenders to keep interest rates competitive.

        2. Break costs

        If you leave a fixed-rate home loan early, you’ll probably face break fees. These are usually a calculation based on the difference between the bank’s wholesale funding rate, your mortgage rate and how long you have left on the loan. This could add up to thousands of dollars.

        3. Repayment restrictions

        Lenders typically restrict extra repayments to $10,000 per year on fixed-rate home loans, and there are usually penalties if you go over this cap. If you manage to pay off the home loan within the allotted fixed period, you’ll probably pay break fees and an early discharge penalty.

        4. Fewer features

        As a consequence of repayment restrictions, fixed-rate loans might not feature an offset or redraw account. These are handy features commonly found on variable-rate home loans that allow you to reduce interest payable on the home loan and keep money stashed away for a rainy day.


        Advertisement

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

        Lender

        Variable
        More details
        UNLIMITED REDRAWSSPECIAL OFFER
        • Fast turnaround times, can meet 30-day settlement
        • For purchase and refinance, min 20% deposit
        • No ongoing or monthly fees, add offset for 0.10%
        UNLIMITED REDRAWSSPECIAL OFFER

        Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

        • Fast turnaround times, can meet 30-day settlement
        • For purchase and refinance, min 20% deposit
        • No ongoing or monthly fees, add offset for 0.10%
        Variable
        More details
        100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
        • No upfront or ongoing fees
        • 100% full offset account
        • Extra repayments + redraw services
        100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

        Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

        • No upfront or ongoing fees
        • 100% full offset account
        • Extra repayments + redraw services
        Variable
        More details
        QLD/NSW/VIC/SA METRO & INNER REGIONAL AREAS
        QLD/NSW/VIC/SA METRO & INNER REGIONAL AREAS

        Variable Home Loan (Principal and Interest)

        • $5000 Cashback. T&Cs Apply.
        Variable
        More details
        REFINANCE ONLY
        • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
        REFINANCE ONLY

        Variable Rate Home Loan – Refinance Only

        • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
        Variable
        More details
        NO ONGOING FEESFREE REDRAW FACILITY
        • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
        NO ONGOING FEESFREE REDRAW FACILITY

        Live-in Variable Loan (Principal and Interest) (LVR < 90%)

        • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.

        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 June 29, 2022. View disclaimer.


        Photo by Aaron Kato 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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