What Is A 30-Year Fixed Rate Home Loan?

There are two main types of home loans in Australia – variable and fixed rate. The former comes with an interest rate that is changeable, and can go up and down depending on a variety of factors, while the latter has an interest rate that is set in place for a fixed period of time.

In most cases when it comes to fixed rate mortgages, lenders will offer terms of between one and five years, and when it comes to purchasing a house, in addition to how much you can afford to borrow, the interest rate of your loan is a very important consideration.

Generally speaking, the longer the period you choose, the higher your interest rate will be, with the added expense coming as a trade off for the certainty of a fixed rate over a greater period of time.

While most banks and lenders in Australia typically only offer fixed rate mortgages for up to five years, some may offer them for a longer period, although you are still unlikely to find a 30-year home loan.

What is a long-term fixed rate mortgage?

A long-term fixed rate mortgage is a loan with a fixed interest rate that is locked in place for longer than the standard duration maximum of up to five years. In Australia, it’s fairly uncommon for a home loan rate to be fixed for long enough to be considered a long-term fixed rate mortgage.

In places such as the United States, longer-term mortgage rates are popular. In the housing market there, you may be able to find an option to lock in a 20- or even 30-year fixed rate mortgage.

Can you get a 30-year fixed rate mortgage in Australia?

At present, there are no banks or lenders in Australia who offer mortgages for a fixed term of 30 years. A survey of home loan options on Canstar’s database reveals that the maximum amount of time you may be able to fix a home loan is 10 years, with only one lender currently offering this as an option.

As mentioned, variable rates, and shorter-term fixed rates of up to five years, tend to be the norm in Australia. Professor Richard Holden of the UNSW Business School has argued in favour of longer fixed-rate mortgage terms, saying there is “no reason” that Australian banks and lenders cannot offer them.

“When the Reserve Bank of Australia (RBA) lifts rates it has huge implications for household budgets, because most borrowers still have variable-rate mortgages,” he said, noting that longer fixed terms would insulate borrowers against big swings in interest rates.

“In the US you can refinance a 30-year fixed mortgage if long-term rates drop,” he said.

“So you benefit if rates go down, but are protected if they go up.”

In spite of the potential benefits they might offer to consumers, though, longer-term fixed rates are not a feature of the Australian mortgage landscape.

What is the longest fixed rate mortgage in Australia?

At the time of writing, the only lender on Canstar’s database offering fixed rate home loans for a term longer than five years is ANZ, which has home loans of with fixed terms of seven and ten years on offer.

If you are seeking a long-term fixed rate mortgage, your options could include:

Source: www.canstar.com.au. 4/03/2025. Based on owner occupied home loans with a fixed term greater than 5 years, $600,000 loan amount, any LVR and principal & interest repayments; excluding introductory and special loans. Comparison rate calculated based on a loan amount of $150,000 and loan term of 25 years.

Generally speaking, the longer you choose to fix a home loan, the more expensive you might expect the interest rate to be. This is typically a trade off for the security of knowing that your interest rate will not fluctuate, and specifically will not go up, no matter what happens during the term of the loan, making it easier to calculate your interest repayments.

If you are currently in the market for a home loan – whether you’re looking at taking out a new home loan, refinancing an existing one, or switching from a fixed to a variable rate or vice versa – Canstar keeps track of the current interest rates on home loans.

This information may give you a picture of the current home loan market in Australia, and how much the average interest rate might be on a variety of fixed rate home loans, as well as variable rate home loans. You can also compare home loans with Canstar to find a product or lender that may suit your particular needs.

Will there ever be a 30-year fixed rate home loan in Australia?

In 2023, a parliamentary research paper posed the question of whether 30-year fixed rate mortgages would be viable in Australia. The authors, Professor Richard Holden and Tim Fuller, identified some potential benefits, saying that a long-term fixed rate mortgage could “insulate borrowers from big swings in variable interest rates” of the type seen in recent years.

The authors noted, however, that in the US, where these kinds of 30-year loans are popular, lenders are more willing to offer them, as the associated credit risk is taken on by government-sponsored enterprises (GSEs) popularly known as ‘Freddie Mac and Fannie May’. No such GSEs exist in Australia, making these kinds of mortgages riskier for lenders.

The paper also noted that the “break fees” required to exit fixed rate mortgages in Australia can be “prohibitively high” for borrowers, which could make them unappealing for borrowers if rates drop long term and they are stuck in an expensive fixed-rate contract. Therefore, the authors argue that we are unlikely to ever see a 30-year fixed mortgage in Australia without significant legislative change.

Cover image source: Rido/Shutterstock.com