Is 2022 your last chance to lock in a low fixed home loan rate?

After reaching some of the lowest points recorded in years during 2021, interest rates on fixed home loans have started rising across the board.

Longer term fixed rates (4 and 5-year terms) have been ticking up for a while, but in the last few months of 2021 lenders have also started increasing their shorter fixed rates (1, 2 and 3-year terms).

“We had some amazingly low fixed rates last year, but those rates have largely gone now,” says Mozo Banking Expert, Peter Marshall.

“Now that the Reserve Bank’s Term Funding Facility has ended and with the expectation that the official cash rate will start to head north in the next few years, leaders will likely continue to increase their fixed rates - particularly their longer 3, 4 and 5-year rates.”

So given that fixed rates are unlikely to revert to last year's lows, is it still worth locking in a rate, or has the opportunity passed?

“When it comes to interest rates, it’s all relative,” says Marshall. “People looking for rock bottom rates have likely missed out, however, in a couple of years time the fixed rates on offer right now might actually look like a pretty good deal.”

“It’s up to each borrower to do their own risk assessment, and ultimately it will come down to their own situation, but it could be the case down the track that somebody looks back on the rates being offered right now and wishes they had locked in for five years when the opportunity was there.”

Average fixed home loan rates — Mozo database (2015 - 2022)

What does a competitive fixed rate look like at present?

As our graph above shows, fixed home loan rates available to owner occupiers are (on average) still relatively low - at least, compared to most of the period between 2015 to present during which we’ve been tracking them.

Those are just the averages though. There are plenty of lenders offering much sharper rates, including those below which currently have the lowest fixed rates being tracked in the Mozo database.

Lowest fixed rates — Mozo database (January 12, 2022)^^

Of course, the alternative for new borrowers or those looking to refinance is to consider a variable rate home loan. While variable rates can go up or down at any time, broadly speaking, variable rates are around the lowest point they’ve ever been at present.

RELATED: The best home loans in Australia for 2022

Thinking about locking in a rate on your home loan? Get acquainted with a range of rates and loans on offer from different banks and mortgage lenders by using Mozo’s handy fixed rate home loan comparison table.

^^Interest rates are based on an owner occupier making principal and interest repayments on a $400,000 loan with an 80% LVR. For more information on average mortgage rates, check out our dedicated Australian home loan statistics page.