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.

Benefits

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.

Limitations

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.

How to convert your loan to a fixed rate

You can fix your loan from the NAB app in just a few clicks. Here’s how:

  • Login to the NAB app
  • Select your home loan from the account list
  • Select Make changes to your loan
  • If eligible, you can select Fix your interest rate and follow the steps to change your interest rate.

See our step-by-step instructions on fixing the interest on your home loan.

You can also Re-Fix your home loan in the app if you have an eligible home loan with a fixed rate expiring in 45 days or less. Here’s how:

  • Login to the NAB app
  • Select your home loan from the account list
  • Select Make changes to your loan
  • If eligible, you will notice that your fixed rate is expiring and you will have an option to either let it roll over to a variable rate or you can select Fix your interest rate and follow the steps to re-fix your interest rate.

What if you have a joint loan?

If you have a joint loan, the second person on the account will need to review the change. They’ll need the latest version of the NAB app, a personal login and will need to review the change within 48 hours. Or else the request expires after 48 hours. To do this, the second person will have to:

  • Login to the NAB app
  • Select your home loan from the account list
  • Select Make changes to your loan
  • Review the change waiting approval and select Approve or Decline.

See our step-by-step instructions on viewing and accepting changes on joint loans.

If you prefer, we can help you change your loan. You can contact your banker, book an appointment or call us on 13 78 79 from 8.00am to 7.00pm Monday to Friday, or 9.00am to 6.00pm on weekends (AEST/AEDT).