Fixed home loan rates have been repriced across lenders in recent weeks, with many moving higher ahead of the recent March rate rise as markets anticipated further increases.
Fixed rates don’t move directly with the RBA cash rate – they’re driven more by funding costs and bond yields, which reflect where markets expect variable interest rates to go next.
There has been one clear change – sub-5.00% fixed rates have disappeared, with offers now sitting higher as funding costs have increased.
As a rough rule of thumb, fixed rates tend to “pave the way” for variable rates. In other words, “fixed rates generally move first”. In recent times bond yields have been trending upward, reflecting market expectations that interest rates may stay elevated for longer.
What’s happening with fixed rates now
- Shorter-term fixed (1–2 years) has moved more noticeably, tracking near-term rate increase expectations
- Longer-term fixed (3–5 years) has been steadier but has still gradually repriced slightly higher than 1-2 years
- In most cases, fixed rates are currently higher than variable rates
What this means for you
Fixed rates are less about “gambling” with your interest rate, and more about certainty and planning. However, fixed rates do come with risks. We can help you compare fixed, variable and split options and structure your loan around your plans in the current environment.
There are many different types of finance we can help with
View our Services on our website or Contact Us to discuss your needs
