Question 1

What is a fixed rate home loan in Australia?

Accepted Answer

A fixed rate home loan locks in your interest rate for a set period, typically 1, 2, 3, or 5 years (some lenders offer up to 10 years). During the fixed term, your interest rate and repayments do not change, regardless of movements in the RBA cash rate.  At the end of the fixed term, your loan typically reverts to the lender's standard variable rate, unless you negotiate a new fixed term.

Question 2

What fixed rate periods are available in Australia?

Accepted Answer

Australian lenders typically offer fixed terms of:  • 1 year • 2 years (currently popular when rates are expected to fall) • 3 years • 5 years • Some lenders: 7 or 10 years  Shorter fixed terms (1–2 years) offer more flexibility and tend to have lower rates during falling rate environments. Longer terms (3–5 years) provide certainty if you believe rates will rise or stay elevated.

Question 3

What are fixed rate break costs?

Accepted Answer

If you exit a fixed rate loan before the fixed term ends, through refinancing, selling, or making large lump sum repayments, you may incur a break cost (also called an early repayment fee or economic cost fee).  Break costs can be significant, sometimes $10,000 to $30,000+, depending on the remaining fixed term, the loan balance, and how much fixed rates have moved since you locked in.  Your broker will explain these risks clearly before you fix your rate.

Question 4

Can I make extra repayments on a fixed rate loan?

Accepted Answer

Most Australian lenders allow limited extra repayments during the fixed term, commonly up to $10,000–$20,000 per year without penalty. Exceeding this limit may trigger break costs.  Variable rate loans allow unlimited extra repayments with no penalty, one of the key trade-offs when comparing fixed vs variable.

Question 5

Can I get an offset account with a fixed rate loan?

Accepted Answer

Most fixed rate home loans do not offer a full 100% offset account. Some lenders offer a partial offset (e.g., offset on 40% of the loan balance) or a no-fee offset-like feature, but genuine full-offset accounts are generally only available on variable rate loans.  If offset functionality is important to you, a split loan (part fixed, part variable) may be the best of both worlds.

Question 6

What happens when my fixed rate ends?

Accepted Answer

When your fixed period expires, your loan will automatically revert to the lender's standard variable rate, which may be higher than competitive variable rates in the market.  Your Secure Finance broker will contact you approximately 60–90 days before your fixed rate expires to review your options:  1. Fix again for a new term 2. Switch to variable 3. Refinance to a better lender  We manage this proactively so you never roll onto an uncompetitive rate by accident.

Question 7

What is a split loan?

Accepted Answer

A split loan divides your mortgage into two portions, one fixed and one variable. For example, $400,000 fixed and $200,000 variable on a $600,000 loan.  Benefits: • Certainty on the fixed portion • Offset account and unlimited extra repayments on the variable portion • Reduced exposure to break costs  This is one of the most popular loan structures in Australia for borrowers who want both stability and flexibility.

Feature	Fixed Rate	Variable Rate
Repayment certainty	✓ Full certainty	✗ Changes with rates
Rate falls benefit	✗ No, locked in	✓ Yes, auto benefit
Offset account	✗ Usually limited/none	✓ 100% offset available
Extra repayments	Limited ($10K–$20K/yr)	Unlimited
Break costs	May apply	None
Best for	Budget certainty, rising rates	Flexibility, savings offset

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