What is a one-year fixed rate home loan?
A one-year fixed rate home loan is one where the interest rate remains locked in or ‘fixed’ for a period of one year. You’ll have certainty your mortgage repayments will remain the same throughout the one-year period, regardless of whether the Reserve Bank of Australia (RBA) moves the cash rate, or your lender moves its own home loan rates.
Should I fix my home loan for one year?
There are a number of reasons why a shorter fixed rate term might be appealing. You might be considering a one-year fixed rate if:
- You’re a first home-buyer and you want certainty in your repayments through the early stages of home ownership.
- You want a ‘strategic hold’ on your home loan to protect you from sudden rate spikes in the next 12 months.
- You want stability but don’t want to be locked into a longer fixed term in case you decide to sell, refinance, or restructure your loan a few years down the line.
- You simply want some certainty in your household budget, so you’ll know exactly how your weekly, fortnightly or monthly mortgage payments will look for the next year.
Are there any drawbacks to fixing your rate for one year?
There are potential tradeoffs when it comes to fixing your home loan for any length of time. These include:
- No benefit from rate cuts: Fixed rates protect your budget from rate rises, but on the other hand, if interest rates drop, you won’t reap the benefits. You’ll need to remain on your fixed rate, unless you’re willing to pay to get out of it, the cost of which could eat up any potential savings.
- Break fees: If you do need to break out of your one-year fixed rate loan early, say because you’ve decided to refinance, sell your house, or you want to discharge the loan (pay it off), your lender could charge you a hefty break fee.
- Lack of flexibility and features: Fixed rate loans can be more restrictive than variable rates, and you generally won’t have the ability to make unlimited extra repayments. Likewise, fixed rate loans generally don’t offer features like offset accounts and redraw facilities, which can help you save on interest.
- The fixed rate cliff: Also known as the ‘mortgage cliff’, this is the sudden jump in home loan repayments that can happen when your fixed term ends and your loan reverts to a variable rate. If rates go up substantially during your fixed term and your loan reverts to a much higher rate, the shock can be akin to falling off a cliff.
How do you find the best one-year fixed rate home loan?
There’s no one-size-fits-all option for the ‘best’ one-year fixed rate home loan in Australia. That said, Canstar’s Home Loan Awards recognise the lenders offering outstanding value to owner occupiers and investors looking for fixed rate home loans.
Canstar’s 2026 Home Loan Awards: Winners of our Outstanding Value Awards for Fixed Home Lender: Australian Mutual Bank, BankVic, Greater Bank, Horizon Bank, Hume Bank, Pacific Mortgage Group, Unity Bank.
Canstar’s 2026 Home Loan Awards: Winners of our Outstanding Value Awards for Investment Fixed Home Lender: Australian Mutual Bank, BankVic, Greater Bank, Horizon Bank, Hume Bank, Newcastle Permanent, Pacific Mortgage Group, Summerland Bank.
You can see a more detailed breakdown of our Home Loan Award winners, as well as the winners of the variable, fixed and investment categories, by visiting Canstar’s 2026 Home Loan Awards.
How do I compare one-year fixed rate home loans?
Comparing home loans is simple with Canstar. Just scroll to the top of this page, select your loan purpose, and follow the prompts. We’ll present a selection of mortgage products that might fit your needs. Alternatively, you can browse home loans with one-year fixed rates on the table above.
When comparing one-year fixed home loans, it’s important to check the comparison rate as well as the advertised interest rate. The comparison rate is intended to show a loan's true cost, factoring in most standard upfront and ongoing fees as well as the advertised interest rate. In the case of fixed rate loans, the comparison rate will also factor in the ‘revert rate’–the one you might face once your fixed period ends.
A loan with a low advertised interest rate might seem appealing, but the comparison rate could tell a different story.
Can you switch to a one-year fixed rate without refinancing?
Yes, most lenders in Australia will allow you to switch from a variable rate to a fixed rate without going through a refinancing process. This is often referred to as a rate switch or a product switch. This means that if you want to fix your rate for a year, it can be as easy as making the change through your bank’s app or online portal, or giving your bank’s mortgage team a call.
Note that a rate switch is not always free. You may be charged a fee by your lender.
Before locking in a one-year fixed rate with your current lender, it pays to take a pause and consider what else might be out there for you. You can browse one-year fixed rates on the tables above to compare your options and get a sense of what other lenders have on offer. You might find that refinancing to another lender could land you a far better rate than your current lender can promise.
It’s also worthwhile to check your current lender’s website to see what rates it offers to new customers. If the advertised rate for new customers is lower than the rate on offer for you, it’s worthwhile calling your lender to ask if they can match it.
What do you do when your one-year fixed rate ends?
A year can pass in the blink of an eye, and the end of your fixed rate period can catch you by surprise. When your one-year term comes to an end, you’ll generally have to choose one of three options:
Fix your rate again
If you like the certainty of a fixed rate, you might consider simply fixing again. You can negotiate with your lender to move onto another fixed term, and it doesn’t have to be for one year, either. You can normally fix a home loan rate for between one and five years, so if you’d like the certainty of a longer fixed term, that option will generally be open to you.
Let your rate roll over
When your fixed term ends, your loan will likely roll over to your lender’s standard variable rate–this is often known as the revert rate. This may be the path of least resistance, but can be costly, especially if the variable rate is more than what you’re currently paying. Another option that may be open to you is to negotiate a different variable rate with your lender. In fact, it might reach out prior to your fixed rate’s expiry to do just that.
Refinance to another lender
If your current lender’s not cutting the mustard, you can refinance your loan to another with a sharper rate or a better deal on offer. Some lenders even offer cashback to tempt refinancers, but make sure you check the rate and features of the loan to make sure it's a good deal for you.
