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Top 5 Interest Rates In Australia Right Now

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Finding a home can be one of the most exciting moments of your life but what about funding for it? We are here to show you the top 5 fixed and variable interest rates in Australia.

There are a ton of home loan options available out there. Yet the two most common choices are fixed interest rate loans and variable interest rate loans.

A fixed interest rate is when you take out a home loan and the interest rate is set for a certain period. Depending on the lender it’s typically between one and ten years. During that fixed time, your interest rate and your repayments stay the same in the form of a contract between you and the bank.

A variable interest rate is the complete opposite of a fixed rate. It can change at any time based on the lender’s discretion or following the Reserve Bank of Australia (RBA) decisions. Whilst Lenders are not necessarily required to abide by the RBA changes; they may increase or decrease the interest rate attached to the loan. If the interest rate goes up then your repayment will also increase, and it decreases when the interest rate goes down.

How do you choose which option to go with then? It’s all really up to your preferences and we’re here to show you the top 5 fixed and variable interest rates in Australia.

Top 5 Fixed Interest Rates Australia

Fixed interest home loans are great for borrowers who are on a budget; or those who just don’t want to take a gamble with fluctuating interest rates. Having a fixed rate can give you peace of mind as you don’t have to worry about possible increases in rates.

Yet some downsides to fixed interest rates are that there are fewer features than variable interest rates. As well as, if you decide to refinance your home loan before the end of your fixed term; you may incur break costs (costs associated with terminating your fixed-rate early).

So what are the best-fixed interest rates in Australia right now? Here are our top 5 best home loan rates for owner-occupied fixed interest rates:

Owner Occupier, Principal & Interest

Interest rate: 2.68% p.a fixed 2 years

Comparison rate: 2.84% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.79% p.a fixed 3 years

Comparison rate: 3.13% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.84% p.a fixed 3 years

Comparison rate: 3.59% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.84% fixed 3 years

Comparison rate: 2.92% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.84% fixed 2 years

Comparison rate: 3.48% p.a

Key tip: Fixed rates that apply to your loan are offered by the lender only on the day of settlement. There is no guarantee that the fixed rate you see at the time of application is the same as the time of settlement.  Discuss with your lender about locking in the fixed rate when you apply as ‘rate lock’ feature may be available during the application phase. This ensures the final rate remains the same regardless of market movements.

Top 5 Variable Rates

Unlike fixed-rate loans, variable loans are subject to changes made by the Reserve Bank of Australia and the fluctuations of interest rates. This means that you may have lower repayments in one month but if interest rates rise so will the repayments. Despite this drawback, variable interest rate loans are usually the most preferred by borrowers. They offer more flexibility and various features that may come in handy when life changes and circumstances arise. 

Some features that may be offered when you get a variable interest rate loan include:

additional repayments – Allowing you to pay off your loan faster resulting in saving money on the interest of the loan.

redraw facility – Access to borrow the additional repayments you would have made. Be mindful that some lenders may charge additional fees to access additional repayments.

offset account – a savings or transactional account linked to your home loan account. To put it simply, the more money you have in your offset account, the less interest you’ll need to pay for your home loan. Money deposited into the offset account reduces the balance on which the lender charges interest. This means you’ll only be paying interest on the difference.
For instance, if the offset balance is $100,000 and you owe $500,000, you will only be required to pay interest on $400,000 of your loan balance.

What are the top 5 variable interest rates in Australia right now? Here are our top 5 picks for owner occupied rates:

*Homestar will donate $250 to the bushfire appeal for every complete loan application received in Jan & Feb.

Owner Occupier, Principal & Interest

Interest rate: 2.74% p.a variable

Comparison rate: 2.77% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.79% p.a variable

Comparison rate: 2.80% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.82% p.a variable

Comparison rate: 2.86% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.84% p.a variable

Comparison rate: 2.84% p.a

Owner Occupier, Principal & Interest

Interest rate: 2.84% p.a variable

Comparison rate: 2.80% p.a

Can’t Decide An Option?

Maybe you can’t decide on what home loan option would suit you. You might want to consider an option that lets you split the loans to both fixed and variable. There are so many factors to look into when choosing a home loan. There could be other features you would need or other better home loan options. Maybe you even want to be with a lender that acts for social good and not just take your money. Here at Benevolence Financial Group, we’ve got you covered. Schedule a free consultation with us today at your own convenience and we’ll guide and take you through quickly and simply about the right options for you!

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