What is a two-year fixed investment home loan?
A two-year fixed investment home loan locks in your interest rate for two years, meaning your repayments will remain unchanged for that period, regardless of the cash rate or the interest rates your lender charges on other loan types.
After those two years, your loan will likely revert to your lender’s standard variable rate (sometimes referred to as a revert rate), or another rate you’ve negotiated.
Unlike an owner-occupier who is buying a property to live in, investors buy a property with the hopes of profiting from it through rental income or resale when its value rises.
However, lenders generally classify investors as higher-risk than owner-occupiers. That’s in large part because investors may rely on rental income to afford their repayments. Any disruption to this stream of income elevates their risk of defaulting on their loan.
To reflect the increased risk, lenders typically charge investors slightly higher interest rates and offer lower loan-to-value ratio (LVR) limits compared to owner-occupiers.
Should I fix my investment loan for two years?
Fixing an investment loan for two years may be worth thinking about if:
- You’re a risk-averse investor who values certainty in repayments, as fixing might offer you peace of mind
- You prefer to be shielded from interest rate rises but would like the option to reassess in two years’ time
- You don’t mind potentially missing out on certain home loan features, as fixed loans don’t typically come with the likes of offset accounts and the use of redraw facilities can be limited by caps on extra repayments
What are the potential drawbacks to fixing your investment loan for two years?
- Potentially higher interest rates: While investors can usually expect to pay higher interest rates compared to owner-occupiers, in certain economic climates, fixed interest rates may be higher than most variable rates. However, the opposite is also true.
- No benefit from rate cuts: If the Reserve Bank of Australia (RBA) cuts the cash rate, your lender may follow suit on its variable home loan rates. If you’ve fixed your rate, you will not benefit from any rate cuts until the fixed period expires.
- Break fees: You may incur significant break fees if you end your loan during the fixed period to refinance, sell the property, or to pay back the loan.
- Lack of flexibility and features: Fixed home loans may limit additional repayments, and normally don’t offer features like an offset account or redraw facility, which may help you to reduce your interest charges.
How do you find the best two-year fixed rate investment home loan?
There is no one-size-fits-all two-year fixed rate investment home loan. The best product for your situation will depend on your:
- Risk tolerance: If you’re an investor with a small risk appetite, a fixed term could give you that ease of mind.
- Interest rate: A small difference in interest rates can impact the size of each repayment and significantly add to overall interest costs.
- Your preferred features: If you’re planning to make additional repayments to pay off your loan faster, it may be worth seeking out a lender that allows this.
Canstar’s Home Loan Awards shortlist the lenders offering outstanding value to investors looking for fixed-rate home loans.
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.
Our Canstar 2026 Home Loans Awards page offers a complete breakdown of our Home Loan Award winners, including winners in the investment, fixed, and variable rate categories.
How do I compare two-year fixed rate investment loans?
At the top of the page, simply select your loan purpose and follow the prompts on-screen to compare mortgage products that may meet your criteria from our panel of providers.
You can also browse investment home loans with two-year fixed rates shown on the table above.
Be mindful that a loan’s advertised interest rate excludes ongoing and upfront fees, as well as the revert rate you’re likely to realise once a fixed term expires. A loan’s comparison rate will account for these charges alongside its interest rate.
A loan with a low interest rate may be a tempting proposition, but its comparison rate can be a more accurate measure of its ‘real’ cost.
Can you switch to a two-year fixed rate without refinancing?
Yes, many lenders can help you switch from a variable to a fixed rate without needing to refinance. Also known as a rate or product switch, it could be as simple as logging into your lender’s app or online portal, or contacting their mortgage team. Take note that a product switch may incur a charge, depending on the lender.
But before making a decision, we suggest browsing two-year rates on our table to better understand what loans and rates are on offer from other lenders.
You may find another lender offering better features or interest rates than your existing loan. In this case, you might consider reaching out to ask your current lender for a better mortgage deal or refinancing to a different home loan lender (fees may apply).
How long can you fix a rate on an investment home loan for?
Most lenders generally offer a maximum fixed period of five years. However, some may be comfortable with fixing your home loan for up to 10 years.
How much of a deposit do you need for an investment home loan?
Most lenders require a borrower to put down a deposit of at least 20% of the investment property's price. While smaller deposits may be accepted, your lender may require you to pay Lender’s Mortgage Insurance (LMI). This protects the lender if you default on your home loan repayments.
If you choose to roll the cost of your LMI into your mortgage, you may have to pay interest on it throughout the life of the loan.
Can you use equity to invest in property?
It may be possible to use equity you have in an existing property to fund some or all of the deposit, if you wish to purchase a new property as an investment.
Equity is the difference between the value of your property and how much you still have left to pay on your mortgage. Though, not all will be considered ‘usable equity’, as you normally can’t borrow against more than 80% of a property’s value without paying for LMI.
If you have owned a property for a while and have paid off a chunk of the mortgage, you may find you have a reasonable amount of usable equity in the property.
What happens if you lie on your investment home loan application?
If your lender discovers that you have lied on a mortgage application (perhaps you’ve applied for an owner-occupier loan but plan to rent the property out), it is likely to reject your application.
You may also receive a black mark against your name with that institution, making it hesitant to do business with you again in the future.
If a lender finds out that you lied on your application (which can amount to fraud) after it is approved, it may have the right to recall your home loan. In this situation, the lender may give you a short window to pay off the balance of the loan.
What happens at the end of a fixed investment home loan term?
When a fixed home loan comes to an end, whether you locked your rate in for two years, or for a shorter or longer period, your rate will typically revert to a variable rate.
At this point, you have the following options:
Fix your rate again
Once your two-year fixed period passes, you might lock in a new fixed term of your ideal duration.
Let your rate roll over
If variable rates are lower than the rate you’d fixed at, you may find yourself paying less when your fixed term expires. However, the opposite could also be true. Your repayments may be costlier if variable rates are much higher than your fixed rate.
If your revert rate is higher than you’d like, you can negotiate with your lender or explore refinancing to avoid facing, or at least minimise, a steep mortgage cliff.
Refinance to another lender
If you’re not satisfied with your new variable rate, consider refinancing to another lender offering more competitive rates and features. Some lenders even offer cashback or bonuses, but it’s best to study their rates and features before committing.
