Should I fix my home loan?

Fixing your home loan can be a good way to take control of your budget. When you fix your home loan with BOQ, you’re able to lock in a rate for a nominated period of one to five years. Your repayments won’t change during the fixed rate term, providing you with greater certainty.

But it is not for everyone. Fixing your home loan means you miss out on the potential benefits of a variable loan, like an easing of your family budget if interest rates fall and greater flexibility with your money.

Our Fixed Rate Home Loan

Know what your repayments are for peace of mind

Fixed Rate Home Loan

A fixed rate home loan gives you the certainty of knowing exactly what your repayments will be for up to 5 years, while protecting yourself against any potential interest rate rises.

  • Owner occupier and investor options available
  • Great interest rates across our range of terms
  • Repayment options available include Principal and Interest repayments and Interest Only repayments

Fixed home loan rate vs variable rate

Not sure if a fixed rate or a variable rate is more suitable for you? Here are some things to consider.


Fixed rate home loan

Variable rate home loan

When might I  consider it?

  • I want to lock in a rate for a set period of time
  • I prefer certainty of repayments to help me with budgeting
  • I’m less concerned about changes to interest rates
  • I want to make additional repayments
  • I need to access redraw
  • I’m considering selling my property 
Can I make additional repayments into my home loan?
  • Yes, up to $10,000 per annum (penalty costs may apply when exceeding this threshold)
  • Yes, unlimited additional repayments are allowed
Can I access redraw?
  • Not during the fixed rate term
  • Yes
Can I offset funds against the loan?
  • Not during the fixed rate term
  • Yes for all of BOQ’s variable rate home loans excluding Economy Home Loans
Why I might not consider it?
  • I might sell my property within the fixed rate term (two to five years)
  • I want to make additional repayments of more than $10,000 per annum off my loan 
  • I’m worried about changing interest rates

What happens after my fixed rate home loan expires?

At the end of your fixed rate term (two to five years) your home loan will automatically convert to a variable rate home loan with Principal and Interest loan repayments. As a result, your repayment amount is likely to change. But you do have other options. Depending on what’s important to you, you can:

  • Fix your home loan for another fixed rate term;
  • Get a split home loan with fixed rate and variable rate portions; or
  • Automatically convert to a variable rate.

If you’re not sure what to do, don’t worry. We’ll get in touch with you around 30 to 60 days before your fixed rate term expires to talk about your options and what you’d like to do next. 

Break costs

What are break costs and when are they charged?

Sometimes life happens and circumstances change. As a result you may find that you need to ‘break’ your current fixed rate term.

This can happen when you:

  • Discharge your loan to pay it out, sell your property or refinance to another institution.
  • Make additional repayments in excess of $10,000 per annum during the fixed rate term (with the first one year period starting on the first day of your fixed rate period).
  • Make a change to your loan such as switching to a variable rate, changing your repayment type (Principal and Interest or Interest Only) or changing your loan purpose (Owner Occupied or Investor).

While breaking a fixed rate home loan isn’t a problem, you should expect to pay break costs.

Why are break costs charged?

When you decide to fix your home loan interest rate, BOQ enters into a contract with you to fix the interest rate for your loan for a specified period. At the same time we also enter into a contract with a third party to lock in our funding costs at a fixed interest rate for the same period.

If you break your fixed rate term and wholesale rates have fallen since you initially fixed your home loan, we will incur a loss. This is because BOQ will still need to fulfil the contract we entered into with the third party, which will be based on the higher wholesale rates that applied when we entered into this agreement. Break costs are charged to cover this financial loss.

What’s the cost of breaking a fixed rate mortgage?

Break costs will vary depending on a number of factors, like your fixed rate term, how much longer you have on your fixed rate period and the current balance of your loan.

For further details on how break costs are calculated, check out our ‘Break Costs Fact Sheet’. 

Tips on buying your first home

Buying My First Home

Buying your first home is often an exciting, but also overwhelming experience filled with challenges and decisions that need to be made along the way.

Refinance your home loan to BOQ

Refinancing Your Home Loan

Refinancing could potentially save you thousands in interest repayments with a lower interest rate and added financial flexibility to suit your lifestyle change.

Useful tips on your home loan

Manage Your Home Loan

Find out how to get the most out of your home loan at BOQ.

Need more information?

We’re here to answer any questions you may have.

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