5 Year Fixed Home Loans
Five Year Fixed Rate Loans – The Basics
What is a Five Year Fixed Rate Loan? A Fixed Rate Loan is one in which your interest rate is locked in for a period of time – usually one to ten years. You are guaranteed no rate increases no matter what happens... even if the Reserve Bank of Australia increases the official cash rate and your lender decides to do the same.
Compare these loans with 194 other products
| Lender | Product | Rate | Min deposit | 100% offset | Redraw | Extra Repay | Constr- uction | Enquire |
 | Heritage Bank Fixed 5 Year | 6.59% | 10% |  | | |||
 | Citibank Fixed 5 Years | 6.60% | 10% | | ||||
 | AMP Fixed 5 Year | 6.69% | 10% | | ||||
 | St George Advantage Package Fixed 5 Years | 6.74% | 10% | | | |||
 | CBA Wealth Package Fixed 5 Years | 6.74% | 5% | | ||||
 | BankWest Fixed 5 Years | 6.74% | 10% | | | |||
 | NAB Choice Package Fixed 5 Years | 6.74% | 5% | | | |||
 | ANZ Fixed 5 Years | 6.79% | 10% | | | |||
 | ING Direct Fixed 5 Year | 6.79% | 10% | | ||||
 | Westpac Premier Advantage Fixed 5 Years | 6.79% | 13% | | | | ||
| NAB Tailored Fixed 5 Years | 6.84% | 5% | | | |||
| CBA Fixed 5 Years | 6.89% | 5% | | ||||
| St George Fixed 5 Years | 6.89% | 10% | | | |||
| Westpac Fixed 5 Years | 6.99% | 13% | | | | ||
| NAB Rural Lifestyle Fixed 5 Years | 7.24% | 30% | |
Why choose a Five Year Fixed Rate? This type of loan is good for long-term repayment security. Having a fixed interest rate helps you save money as your repayment amount is already determined; it will not go up for the length of your term. The money you save from this can be invested and turned into more profit. There are usually no fees and, remember, no interest rate increases. Interestingly, a Five year Fixed Rate can be applied to an existing loan at any time. It is always an option for you.
Who should consider this type of Loan? Every homeowner or potential homeowner should think about getting this type of loan. The only time you should not apply for any kind of fixed rate loan is if you are...
- Seriously planning to make extra repayments on your loan,
- Believe you may sell your home in the near future, or
- Think you might need a more flexible loan such as a line of credit.
Where would I go to find this type of loan? Often there is not much difference between banks when it comes to certain types of loans. This is not the case with the Five Year Fixed Rate Loan. Since interest rates change constantly – on a day-to-day basis – banks are able to change their rates with much more freedom than with other types of loans. Also, since what the market may or may not do is subjective, banks rely on the economic opinions of their trusted financial advisers. And these opinions vary widely, as opinions usually do.
How do I apply for a Five Year Fixed Rate Loan? These days most people do the majority of their shopping on the Internet. Even when it comes to loans and other financial opportunities. In the case of the fixed rate loan, this may not be the best idea. Especially for the novice. A financial broker may be able to help you find the lowest rate. Since interest rates change almost daily, major lenders are more likely to negotiate and offer discount packages. When you begin your search, be sure to look for the following:
- Zero monthly account fees
- Low fixed interest rate
- Competitive rate to help you save
- Flexibility to make extra repayments
- Unlimited redraw
When is the best time to look at a Five Year Fixed Rate Loan? Some say when the market is volatile, some say when the market is calm. Clearly, the absolute best time to consider this type of loan is when the rates are currently stable but you (and your financial adviser) think they are going to spike. Sometimes banks raise their rates when the market is going crazy; unfortunately, they are trying to take advantage of the fear and worry we all feel when times are bad. Better to seize the moment on a clear, calm day and lock in that great rate. Another good time to choose a Five Year Fixed Rate is when you really need your monthly payments to be the same for a substantial period of time. Remember, since your interest rates don't go up, neither will your monthly repayment.
No one, even well-known financial experts, can know where interest rates are going. Though your choice of loan should take into account the current financial climate, in the end your choice will come down to what you are doing now, what you see yourself doing in the future, and what you want your loan to do for you.
