Fixed-Rate Mortgage

Know what your mortgage rate could mean.

A fixed-rate mortgage can give you greater certainty over your mortgage payments for an agreed period. Learn how fixed rates work, what to consider before choosing one and what can happen when the fixed period ends.

Estimate Your Repayments → Compare Mortgage Types
Fixed Rate Rate stays fixed for an agreed period
Payment Clarity Greater certainty during the fixed period
Plan Ahead Consider what happens when it ends
Couple planning their home mortgage
THE KEY IDEA More payment certainty. Your mortgage rate remains fixed for the agreed introductory period.
Fixed-Rate Mortgage Explained

What is a fixed-rate mortgage?

A fixed-rate mortgage is a mortgage where the interest rate is set at a particular level for an agreed period. This means your mortgage rate does not change during that fixed period, even if wider interest rates move.

This can make it easier to plan your household budget because the interest rate applied to your mortgage is known during the fixed period.

However, a fixed rate does not necessarily mean every part of your mortgage cost stays unchanged. Fees, insurance, taxes and other household costs can still vary, and your rate may change when the fixed period ends.

01 Your agreed interest rate remains fixed for the specified period.
02 Monthly mortgage payments can be easier to budget for during that period.
03 You should understand the rate and costs that could apply after the fixed period.
How It Works

A fixed-rate mortgage has three important stages.

Understanding the timeline can help you compare mortgage products more effectively and avoid being surprised when the initial fixed period comes to an end.

01

Choose the fixed period

The mortgage product will specify how long the introductory fixed rate applies. The exact period depends on the product and lender.

02

Make your repayments

During the fixed period, the agreed mortgage rate remains fixed. Your repayment will still depend on factors such as the loan amount and mortgage term.

03

Review what happens next

Before the fixed period ends, review your options and understand which rate may apply afterwards. This is an important part of mortgage planning.

Mortgage Costs

How can a fixed rate affect your mortgage payments?

The interest rate is only one part of the mortgage calculation. Your monthly repayment is also influenced by how much you borrow and the length of your mortgage term.

A longer term can reduce the regular payment in some circumstances, but it can also mean paying interest over a longer period. A shorter term can increase monthly payments while potentially reducing the overall interest paid.

Loan Amount The amount borrowed directly affects the size of your mortgage repayments.
Interest Rate The fixed rate determines the interest charged during the agreed period.
Mortgage Term The repayment period can influence both monthly payments and total interest.
Fees Product and arrangement fees can affect the overall cost of borrowing.
Modern house representing mortgage affordability
Things To Consider

The benefits and trade-offs of fixing your rate.

A fixed-rate mortgage can offer useful certainty, but it may not suit every borrower or every market environment. Consider the complete product rather than focusing only on the initial rate.

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Potential advantages

A fixed rate can make your mortgage payments more predictable during the agreed fixed period.

✓ Easier budgeting while the fixed rate applies.
✓ Greater protection from rate increases during the fixed period.
✓ Greater certainty when planning household finances.
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Important considerations

The certainty of a fixed rate can come with restrictions or costs that should be understood before committing.

→ Early repayment charges may apply depending on the mortgage terms.
→ Your rate can change after the fixed period.
→ A lower headline rate does not automatically mean a lower overall cost.
Family home and mortgage planning
BEFORE YOU CHOOSE Look beyond the initial rate.
Compare Carefully

What should you check before choosing a fixed rate?

Comparing mortgage products involves more than checking the initial interest rate. Look at the complete terms, fees and what happens when the fixed period ends.

01 Check how long the fixed rate applies and what rate may apply afterwards.
02 Look at arrangement fees and other costs associated with the mortgage product.
03 Understand any early repayment restrictions before committing to the mortgage.
04 Consider whether the expected repayments fit comfortably within your budget.
Continue Your Research

Explore the wider mortgage picture.

Once you understand fixed-rate mortgages, these existing GrowthSmartly resources can help you continue researching your options.

MORTGAGE TYPES

Compare Mortgage Types

Explore fixed, tracker, variable, discount, interest-only and other mortgage options.

Explore Mortgage Types → MORTGAGE GUIDE

Mortgage Guide

Learn more about deposits, affordability, mortgage costs, interest rates and repayment terms.

Read Mortgage Guide → CALCULATOR

Mortgage Calculator

Estimate potential mortgage repayments using borrowing amount, interest rate and mortgage term.

Calculate Repayments → CREDIT

Credit Score

Understand credit scores and the factors that can form part of your wider credit profile.

Understand Credit Scores → CREDIT REPORTS

Credit Reports

Learn what information a credit report can contain and why checking your information can be useful.

Explore Credit Reports →
Frequently asked questions about fixed-rate mortgages
Frequently Asked Questions

Fixed-Rate Mortgage FAQs

Quick answers to common questions about fixed-rate mortgages, payments, rate periods and costs.

A fixed-rate mortgage is a mortgage where the interest rate remains fixed for an agreed period. This can provide greater certainty over mortgage payments during that period.
The fixed period depends on the mortgage product. Different products can offer different introductory fixed periods, so check the specific mortgage terms before making a decision.
The interest rate remains fixed during the agreed fixed period, but the exact payment can depend on the mortgage structure, balance, term and any applicable fees or changes specified in the product.
When the fixed period ends, your mortgage may move to another rate according to the mortgage terms unless you arrange another suitable product. It is sensible to review your options before the fixed period ends.
Not necessarily. The overall cost depends on the interest rate, mortgage term, product fees, repayment conditions and what happens after the fixed period. Comparing the complete mortgage is important.
Early repayment may be possible, but the mortgage product can include early repayment charges or other conditions. Always check the specific terms before making an early repayment.

Make your mortgage decision with more clarity.

Understand the fixed period, compare the complete mortgage cost and consider what could happen when your introductory rate ends.

Estimate Mortgage Payments → Compare Mortgage Types
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