Fixed rates hit the 4’s - but are they worth it?
Seven lenders are now offering fixed rates from 4.99% as banks plate up sub-5 per cent rates in a bid to get more borrowers to lock in their rates.

Seven lenders are now offering fixed rates from 4.99% as banks plate up sub-5 per cent rates in a bid to get more borrowers to lock in their rates.
Seven lenders are now offering fixed rates from 4.99% as banks plate up sub-5 per cent rates in a bid to get more borrowers to lock in their rate.
While the majority of these deals are for owner-occupiers paying principal and interest, two banks—Australian Mutual and Police Bank—are also offering this sub-5% rate to investors.
How many lenders now offer a fixed rate starting with a 4?
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Lenders offering at least one fixed rate starting with a 4 |
||
---|---|---|
Rate | Fixed term | |
Australian Mutual Bank | 4.99% | 2-year*, 3-year |
Bank of Queensland (BOQ) | 4.99% | 2-year, 3-year |
Community First Bank | 4.99% | 2-year, 3-year |
GMCU | 4.99% | 2-year |
Queensland Country Bank | 4.99% | 3-year |
Pacific Mortgage Group | 4.99% | 1-year, 2-year, 3-year |
Police Bank | 4.99% | 3-year |
Source: Canstar.com.au. Notes: sorted in alphabetical order. Rates are for owner-occupiers paying principal and interest. Deposit size and other requirements apply. *2-year Australian Mutual rate is a first home buyer loan.
Which comes out on top – the lowest 2-year fixed or the lowest variable?
If the average borrower with a $600,000 loan and 25 years remaining switched to the lowest 2-year fixed rate at 4.99% instead of the lowest variable rate at 5.34%, and there were two more standard RBA rate cuts through to the end of this year, as forecasted by CBA, they could end up paying an estimated $1,149 more in interest in the 2-year fixed rate term, compared to if they had opted for the lowest variable.
This assumes banks pass on each RBA cash rate cut in full and that there are no further cuts or hikes for the remainder of the fixed term—none of which are a certainty.
However, this equation could potentially turn out in favour of fixed if there ends up being just one more cash rate cut in the fixed rate term, a cash rate hike, or if there are two or more RBA cuts but lenders opt not to pass them on to their variable rate customers.
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Fixed vs variable: $600k loan with 2 more RBA cuts – CBA forecast |
||
---|---|---|
Rate today | Interest – next 2 yrs | |
Lowest 2-year fixed | 4.99% | $58,686 |
Lowest variable | 5.34% | $57,537 |
Difference | -0.35% pts | +$1,149 |
Source: Canstar.com.au. Notes: based on a refinancer as an owner-occupier paying principal and interest with a $600K loan in July 2025 and 25 years remaining. Assumes there are 2 cash rate cuts through to the end of year (CBA forecast) and the cash rate remains steady following this. Calculations are estimates and do not include fees or any extra repayments. Lowest rates exclude green and introductory rate loans.
Banks looking to get borrowers on fixed rates
Canstar’s data insights director, Sally Tindall says, “fixed rates continue to drop like flies as lenders look to lock in more customers with a rate starting with a 4. With seven lenders now offering at least one fixed rate under 5 per cent, and the prospect of further cash rate cuts likely, we expect more banks to follow suit.”
Ms Tindall says while most borrowers are currently steering clear of fixed-rate mortgages, the growing availability of rates starting in the 4 per cent range might entice more to consider locking in their interest rates.
“For those wondering whether they’ll be better off financially on a highly competitive fixed rate, versus a competitive variable one, know that the maths could well be finely balanced. One or two cash rate cuts early, which lenders pass on in full to variable customers, could tip the scales in favour of variable. However, if we only see one more cash rate cut, or if we get two cuts that come next year, then fixing might well come out on top,” she says.
“In this highly volatile environment, it’s impossible to say with any certainty which will be cheaper, so instead consider putting the crystal ball aside and thinking about which type of loan structure suits your finances, and your personality better.
“If and when you do make a decision on whether you want to fix or go variable, spend some time shopping around for a competitive deal as that’s what could potentially make a big difference, particularly if you’re lugging around a jumbo-sized mortgage.
“If you do decide to fix, understand the implications if you want to break the contract early and make sure you’re happy with your rate, come what may.”
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Lowest fixed rates on Canstar.com.au | ||
---|---|---|
Term | Lender | Lowest rate from |
1-year | Pacific Mortgage Group | 4.99% |
2-year | Australian Mutual Bank, BOQ, Community First, GMCU, Pacific Mortgage Group | 4.99% |
3-year | Australian Mutual Bank, BOQ, Community First, Pacific Mortgage Group, Police Bank, Queensland Country Bank | 4.99% |
4-year | BOQ | 5.29% |
5-year | BOQ | 5.29% |
Source: Canstar.com.au. Excludes eco loans. Note: rates are for owner-occupiers paying principal and interest. Deposit size and other requirements apply
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Lowest variable rates on Canstar.com.au | |
---|---|
Lender | Lowest rate from |
Horizon Bank | 5.24%* |
Pacific Mortgage Group | 5.34% |
Homestar Finance | 5.39% |
People’s Choice Credit Union | 5.39% |
The Capricornian | 5.39% |
Mortgage House | 5.39% |
RACQ | 5.39% |
Australian Mutual | 5.39% |
Transport Mutual Credit Union | 5.39% |
Source: Canstar.com.au. Excludes eco loans and introductory rate loans. Note: rates are for owner-occupiers paying principal and interest. Deposit size and other requirements apply. * Horizon Bank is a first home buyer loan.
Cover image source: Chay_Tee/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.

The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.