Fixed rates fall in Feb: should I lock my home loan rate or wait?

By Jack Dona · · 2 min read
Fact Checked

In a nutshell...

  • The average fixed-rate home loan in our database dropped in February
  • The cuts made to fixed-rates this month ranged from 0.05% to 1.00%
  • The average 1-year fixed-rate in our database on 15 Feb is 6.51% p.a.
  • The lowest 1-year fixed-rate in our database on 15 Feb is 5.79% p.a.
A collage featuring a man thinking whether or not to fix his home loan rate, represented by a thought bubble with a padlock in it. He stands in front of a nice, modern home.

In February, fixed-rate home loans are coming down across the board, thanks to the shifting tides of inflation and the increasing likelihood of a Reserve Bank interest rate cut later in the year.

In the first two weeks of this month alone, we have tracked 32 standard fixed-rate cuts from 10 home loan lenders, which ranged from 0.05% trims, all the way up to chops of 1.00%.

Among the lenders cutting their rates by significant margins are HSBC, Orange Credit Union, and Aussie.

HSBC cut its Fixed Rate Home Loan (OO, P&I, $400k, <80% LVR) by between -0.60% to -0.80%, depending on the length of the term.

Orange Credit Union slashed 1% off its 3-year Fixed Rate Home Loan (OO, P&I, $400k, <80% LVR), taking it from a comparatively high rate of 7.14% p.a. down to 6.14% p.a. (7.09% p.a. comparison rate*).

Aussie’s 3-year Select Basic Fixed home loan (OO, P&I, $400k, 70-80% LVR) dropped by 0.50% too.

Home loan terms explained

OO = Owner-occupier | P&I = Principal and interest | LVR = Loan-to-value ratio View

Fixed-rate home loans in our database have overall trended slightly downwards over the past two months, particularly on fixed terms longer than one year.

Average fixed rates December to February (as at 15 February 2024)†

Average 1-year fixed rate
Average 3-year fixed rate
Average 5-year fixed rate
15 Dec 2023
6.55% p.a.
6.45% p.a.
6.66% p.a.
15 Jan 2024
6.54% p.a.
6.44% p.a.
6.64% p.a.
15 Feb 2024
6.51% p.a.
6.38% p.a.
6.59% p.a.
†Based on an owner-occupied home loan, paying principal & interest at $400,000, LVR <80%, as at 15 February 2024.

If you do choose to lock in a fixed home loan, you risk missing out on falling variable rates if the RBA cuts the cash rate.

It’s a gamble to say exactly when the RBA will cut, but experts and several Big Four banks forecast a cut to come in September .

While the average standard variable home loan rate (OO, P&I, $400k, <80% LVR) in our database today is 6.29% p.a., there are still plenty of rates below that to compare, like:

  • Pacific Mortgage Group Standard Variable Home Loan | 5.89% p.a. (5.89% p.a. comparison rate*)
  • The Mutual Bank Special Budget Home Loan | 5.89% p.a. (5.89% p.a. comparison rate*)
  • Community First Bank Basic Variable Home Loan | 5.94% p.a. (5.99% p.a. comparison rate*)
  • Greater Bank Discount Great Rate Home Loan | 5.94% p.a. (5.95% p.a. comparison rate*)
  • Unloan Variable | 5.99% p.a. (5.90% p.a. comparison rate*).

If you do decide to fix, make sure to compare fixed rate home loans to see if you can get a low rate with a lender that suits your needs or consider splitting your loan . Check out a few featured fixed-rate loans below to get your search started.