- 2 Nov, 2017

Our Cheapest Fixed Rate Home Loans for Spring 2017 – Under 4.00% p.a.

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There’s far more to locking in a fixed rate than the lowest interest. While low interest seems attractive at first, it’s essential you also consider your personal and financial circumstances, fees and loan flexibility. If you don’t, then you may find you’re paying far more than you were previously, even if rates rise.

Fixed Rate Home Loan Versus Variable

Before you roll the dice on the fixed rate roulette table, you need to consider what you gain by fixing your loan instead of staying variable. Let’s compare the two loan types.

Fixed Versus Variable Home Loan
Home Loan Factors Fixed Variable
Less Financial Stress YES NO
Rate Certainty YES NO
Budgeting Assurance YES NO
More Loan Features NO YES
Pay Off as Much as You Like NO YES
Sell When You Want Without Penalty NO YES


If you want less financial stress with rate certainty, budgeting assurance and you don’t plan to sell, then go fixed. However, if you want competitive and flexible features – offset and redraw – and to pay off your home faster or you’re looking to sell, then leave your home loan variable.

A fixed rate home loan gives you less flexibility, but greater budgeting assurance. On the other hand, a variable rate home loan gives you a lot of flexibility, but can increase your financial stress.

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The Pros and Cons of Fixed Rate Loans

So, we’ve compared fixed and variable rate home loans. But, what are the benefits and disadvantages of a fixed rate mortgage?

The Benefits

  • Repayment sureness – Opting for a fixed rate removes financial stress because you know what your monthly repayment will be even if rates shift. This type of payment sureness means you don’t need to monitor rate decisions.
  • Greater security – A fixed rate home loan protects you against rate rise. This security eases financial burden, reduces stress, and makes life more enjoyable.
  • Loan term flexibility – Fixed rate home loans have varying loan terms of 1, 2,3 and 5-years, giving you greater flexibility.

The Disadvantages

  • Decreased flexibility – When you fix your mortgage, you restrict the amount you can pay off your home loan. While most lenders let you pay off extra, they limit this to a certain amount. If you go over this amount, you’ll pay an added fee.
    Also, most fixed rate home loans don’t give you access to features such as an offset account. If they do, then your interest rate is typically higher.
  • Break fees – If you want to break your fixed rate term before it ends, then this can be costly. Break costs are payable if you borrowed at a higher rate than the current market rate. Lenders charge a break fee because they need to recoup their borrowing costs.
  • Rate drop – If the Reserve Bank or your lender drop rates, then you are left paying a higher rate than needed. This scenario can be costly, especially if your term is long.

So, what are some of the top fixed rate options on the market?

Three of the Top Fixed Rate Loans on Our Panel – Under 4%

To enable you to find an affordable fixed rate home loan, we’ve found three of the top fixed-rate loans on our panel.

The three cheapest fixed loans use the following criteria:

  • Rates – as of 3rd November 2017
  • Loan amount – $400,000
  • Property value – $500,000
  • Loan term – 30-years
  • Repayment type – principal and interest
  • Loan purpose – owner occupied
  • Repayment frequency – monthly
  • Interest rate type – fixed
  • Based on – full documentation and exclude construction and line of credit loans.

Fixed Interest 1 Year – Suncorp Bank

Having a minimum loan amount of $150,000 and a maximum of $5,000,000, the 1-year fixed interest home loan offered by Suncorp suits owner-occupiers looking to lock-in a lower rate for longer. This option then gives home owners an opportunity to save more over an extended period. Unfortunately, this loan comes with no added features such as an offset or redraw facility. However, with a loan rate of just 3.69%, and a comparison of 4.26%, this loan is one of the cheapest on the market. Plus, home buyers only need a 10% deposit if they are interested in this loan. This loan includes:

Suncorp Bank
Interest Rate 3.69%
Comparison Rate 4.26%
Offset Account No
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 90%
Annual Fee $375
Monthly Fee $0
Application Fee $0
Monthly Repayment $1,838


Fixed 3 Year – Auswide Bank

With a longer fixed period, this home loan is ideal if you are seeking budgeting assurance for longer. Suited to those buying a smaller home or those wishing to borrow no more than $499,000, this loan has a minimum lending limit of $250,000. Looking to help home owners reduce their mortgage burden and increase their cash flow, this home loan has an LVR of 90%. Therefore, a smaller deposit is needed to secure the loan. Other loan features include:

Auswide Bank
Interest Rate 3.70%
Comparison Rate 4.73%
Offset Account No
Offset Cost $0
Redraw Facility Yes
Redraw Cost $0
LVR 90%
Annual Fee $395
Monthly Fee $0
Application Fee $0
Monthly Repayment $1,841


Fixed Option 2 Year – UniBank

Offered by UniBank, this loan has an LVR of 90% meaning you’ll only need a 10% deposit to secure the loan. Also, this loan has no monthly fee and a lower revert rate, after the fixed period ends. UniBank is a well-known lending institution established in 1994 who support students, university staff and graduates. As such, they offer affordable lending packages with flexibility such as an offset account. Other features this loan includes are as follows:

Interest Rate 3.84%
Comparison Rate 5.13%
Offset Account Yes
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 90%
Annual Fee $200
Monthly Fee $0
Application Fee $600
Monthly Repayment $1,872


Are you seeking to fix your home loan for under 4%? Then contact eChoice, our brokers have access to 100’s of home loan products. So, we’ll find you the right mortgage.

Things you should know:

This information does not constitute as financial advice. Terms and conditions, fees and charges and normal lending criteria apply. Information & interest rate is current as at 3rd November 2017 & is subject to change. The comparison rate is based on a loan amount of $150,000 over a loan term of 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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