What is a fixed home loan rate?

A fixed rate refers to a loan where your interest remains the same (fixed) for a specific period. This means that your minimum monthly repayments won’t change while your loan is fixed. At NAB, we offer terms between one and five years.

This differs from a variable home loan rate, which can change periodically due to fluctuations in interest rates. When this occurs, your minimum monthly repayment can increase or decrease.

Is fixing your home loan rate right for you?

While choosing what type of home loan rate is right for you depends entirely on your financial circumstances, there are some benefits and limitations to fixed terms you should consider. We understand it’s a big decision to make, so if you need help deciding, feel free to contact us on 13 78 79.


The main benefit of a fixed rate home loan is certainty.

  • Your minimum repayments won’t change during the fixed term.
  • You will be protected against interest rate rises.
  • You will have the ability to budget knowing your repayments.


While having peace of mind knowing your interest rate won’t change during the term period, it’s also important to understand that fixing your home loan rate does have some limitations.

  • You won’t benefit from any variable interest rate reductions during the fixed term.
  • Fixed rate home loans don’t give you access to an offset account.
  • Redraw is not available during your fixed rate term.

Understanding break costs

When you fix your home loan interest rate, you are making an agreement with your lender that you won’t make changes to your home loan during the fixed term. If you choose to make changes during this time, you may be required to pay for what is known as “economic costs”.

These costs may be charged when:

  • You make additional payments (above $20,000) on the loan during the fixed term.
  • You switch to a different product.
  • You repay the loan in part or in full before the end of the fixed rate term.
  • The total amount owing is due because the loan is in default.

Economic costs can be significant and vary on a daily basis. Make sure you find out more about economic costs before fixing your home loan.