What Is A 30-Year Fixed Rate Home Loan?

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What is a 30-year fixed rate mortgage, how does it work, and is it even possible to get one in Australia? Here are some important things to know.

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. 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.

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 a small number of lenders 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.

Where can you get a long term fixed rate mortgage in Australia?

At the time of writing, there are only five lenders on Canstar’s database – ANZ, ME, Newcastle Permanent, Pepper Money and RAMS – who offer fixed rate home loans for longer than five years. Of these, only four offer loans of 10 years, with ME offering customers a maximum of seven years.

The below table displays the provider and product name, the maximum loan to value ratio (LVR) of the home loan, and the interest and comparison rates. The table is sorted alphabetically by the name of the provider, then by the length of the fixed term.

Product	Fixed term length	Interest rate	Comparison rate
ANZ Residential Fixed 7 yrs (80% max LVR)	7 years	7.49%	6.32%
ANZ Residential Fixed 10 yrs (80% max LVR)	10 years	7.49%	6.76%
ME Member Package Flexible Fixed P&I 6 yrs (70% max LVR)	6 years	8.09%	6.53%
ME Member Package Flexible Fixed P&I 7 yrs (70% max LVR)	7 years	8.09%	6.79%
Newcastle Permanent 7 Year Premium Plus Package Fixed Rate – Special (80% max LVR)	7 years	7.89%	7.16%
Newcastle Permanent 10 Year Premium Plus Package Fixed Rate – Special (80% max LVR)	10 years	7.89%	7.56%
Pepper Money Essential Prime P&I 7 yrs (55% max LVR)	7 years	6.99%	5.96%
Pepper Money Essential Prime P&I 10 yrs (55% max LVR)	10 years	7.39%	6.72%
RAMS Owner Occupier Fixed 10 yrs (95% max LVR)	10 years	7.39%	6.55%

Source: www.canstar.com.au. 12/08/2022. All providers selected offered a fixed period greater than 5 years based on Canstar’s Database. In instances where providers had multiple rates for a single fixed term, the table highlights the product with the lowest interest rate and lowest comparison rate. Comparison rate calculated based on a loan amount of $150,000 and loan term of 25 years.

Are long-term fixed rate mortgages cheaper?

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.

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.

Compare Home Loans (Refinance with fixed rate only) with Canstar

If you’re currently considering a home loan, the comparison table below displays some of the 1-year fixed rate home loans on our database with links to lenders’ websites that are available for homeowners looking to refinance. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest to highest). Products shown are principal and interest home loans available for a loan amount of $500,000 in NSW with an LVR of 80% of the property value. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s home loans comparison selector to view a wider range of home loan products. Canstar may earn a fee for referrals.

ANZ | Owner Occupied | LVR ≤80% | Fixed for 1 year

Cashback

via a Canstar Certified Mortgage Broker

Fees & charges apply, Australian Credit Licence 234527 | ^#T&Cs apply

Westpac | Premier Advantage Options Home Loan | Owner Occupied | LVR 70-80% | Fixed for 1 year

via a Canstar Certified Mortgage Broker

Fees & charges apply, Australian Credit Licence 233714

Pacific Mortgage Group | Owner Occupied | LVR ≤90% | Fixed for 1 year

Link Not Supplied

Fees & charges apply, Australian Credit Licence 364320

Up | Up Home | Owner Occupied | LVR ≤90% | Fixed for 1 year

Link Not Supplied

Fees & charges apply, Australian Credit Licence 237879

MOVE Bank | Everyday Home Loan | Owner Occupied | LVR ≤95% | Fixed for 1 year

Link Not Supplied

Fees & charges apply, Australian Credit Licence 234536

Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular product. If you decide to apply for a home loan, you will deal directly with a financial institution, not with Canstar. Rates and product information should be confirmed with the relevant financial institution. Home Loans in the table include only products that are available for somebody borrowing 80% of the total loan amount. For product information, read our detailed disclosure, important notes and additional information. *Read the comparison rate warning. The results do not include all providers and may not compare all the features available to you.

Home Loan products displayed above that are not “Sponsored or Promoted” are sorted as referenced in the introductory text followed by Star Rating, then lowest Comparison Rate, then alphabetically by company. Canstar may receive a fee for referral of leads from these products.

When you click on the button marked “Enquire” (or similar) Canstar will direct your enquiry to a third party mortgage broker. If you decide to find out more or apply for a home loan, you can provide your details to the broker. You will liaise directly with the broker and not with Canstar. When you click on a button marked “More details” (or similar), Canstar will direct your enquiry to the product provider. Canstar may earn a fee for referral of leads from the comparison table above. See How We Get Paid for further information.

Cover image source: Rido/Shutterstock.com

Thanks for visiting Canstar, Australia’s biggest financial comparison site*

This article was reviewed by our Deputy Editor Sean Callery and Sub Editor Jacqueline Belesky before it was updated, as part of our fact-checking process.

Alasdair Duncan

Senior Finance Journalist

Alasdair Duncan is a Senior Finance Journalist at Canstar, specialising in home loans, property and lifestyle topics. He has written more than 200 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo Finance, The New Daily, The Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au.

In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland.

When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn and Twitter.

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