1-year fixed mortgage rates

Yes, you can negotiate your fixed rate mortgage. Lenders may be open to adjusting the rate, especially if you have a good credit history or significant equity in your property. Success depends on your negotiation skills and the lender's policies. 

Tips for negotiating a lower interest rate on your mortgage 

For example, if you are a customer with a 1-year fixed mortgage rate, you can follow these steps to lower the interest rate: 

• research current rates: search the best 1-year fixed mortgage rates offered by other lenders and compare those to what you have 
• assess your position: ensure your loan-to-value ratio is below 80% and maintain a good credit score 
• prepare your case: gather evidence of competitive rates, your strong repayment history, and any potential incentives for the lender to lower your rate 
• negotiate: contact your lender, present your findings, and ask for a rate reduction, leveraging competitor offers and your financial standing 

There are ways to improve on these steps, such as researching or contacting your lender or mortgage provider. To better your credit score, visit this page on six effective methods. 

Alternatives when negotiation fails 

Switching mortgage lender 

• evaluate offers: look for better rates from other lenders 
• assess benefits: consider if the new lender offers better terms or services 
• consider costs: factor in exit fees and new application fees 

Refinancing or remortgaging 

• lower rates: refinancing might secure a lower interest rate 
• change terms: adjust the loan term or type to suit your financial situation 
• consolidate debt: merge other debts into your mortgage for easier management 

Costs in leaving your mortgage early 

When negotiations with your current lender fail, you might consider leaving your mortgage early. This might not be easy as there are extra paperwork and fees to consider. Be mindful of breaking the fixed rate contract. Any action that prevents you from adhering to the contract's terms and conditions constitutes a breach of the agreement, such as: 

• selling your property 
• refinancing with another lender 
• making early or extra repayments 

Your lender could incur loss or damages because of breaking the contract. Such acts are beyond what is agreed upon by you and your lender and can make you liable to pay certain fees. 

Fees to pay when breaking a fixed rate contract 

• early repayment charges: lenders charge these to compensate for lost interest 
• exit fees: additional fees for processing the end of the mortgage 

For example, if you repay your loan early under a short-term mortgage, which is typically higher than longer ones, you may incur early repayment fees. These charges compensate the lender for lost interest due to the early termination of the fixed rate agreement.  

These are also called "break costs" but there might be different terms that other lenders use. Understanding these potential costs is essential when considering 1-year fixed mortgage rates. 

Advice on negotiating your fixed rate mortgage 

Negotiating your fixed rate mortgage is worth a phone call. Despite the fixed nature of the contract, calling your lender can reveal potential options. Remember, everything is negotiable. 

Also consider evaluating the fixed rate break cost and using that as leverage to move to another lender. By understanding the complexities of lowering 1-year fixed mortgage rates, you can make more informed decisions and potentially save on your home loan. 

Determining the best 1-year fixed mortgage rates depends on various factors like market conditions, individual financial situations, and mortgage lenders. Some major banks stand out among others when it comes to competitive options, such as: 

• ANZ: known for excellent customer service and flexible loan features 

• Westpac: provides incentives like fee discounts and additional loan features 

Home loan rates may change at any time. To find out which mortgage lenders offer the best 1-year fixed mortgage rates, visit our page on Australian mortgage rates. 

Fixed mortgage rate definition 

A fixed mortgage rate is an interest rate that remains constant for the loan's term. This is different from: 

• variable loans: interest rates can change based on market conditions 
• split loans: combines fixed and variable rates, offering stability and potential rate benefits 

Benefits of a fixed rate mortgage 

• stable repayments: monthly payments remain consistent 
• predictable payments: fixed payments provide financial predictability  
• budgeting: easier to allocate budget during the fixed rate period 

Is a 1-year fixed mortgage rate good? 

This type of mortgage rate offers short-term stability and flexibility: 

• rate increase protection: secures against immediate rate increases 
• flexibility: allows reassessment of financial situation after a year 
• budgeting ease: fixed payments simplify financial planning 

1-year fixed mortgage rates generally have higher interest rates than variable ones because they provide stability and protection against potential rate hikes. These fixed-rate mortgages often include early repayment fees if you pay off the loan before the term ends. 

The shortest fixed rate mortgage term in Australia is typically 1 year. This term provides stability in monthly repayments and can be beneficial for those anticipating a move or change in their financial situation soon. 

Short-term home loans 

A short-term mortgage usually refers to loans with terms of 10 years or less. In Australia, the shortest ones include the 1-year fixed mortgage rates. These loans can be beneficial for: 

• quick payoff: ideal for those aiming to repay their mortgage swiftly 
• flexibility: suitable for borrowers expecting to move or refinance soon 

Benefits 

• stable payments: monthly repayments remain unchanged, aiding in budgeting 
• rate protection: shields against interest rate increases during the fixed term 

Drawbacks 

• higher payments: monthly repayments are often higher compared to longer-term loans 

Considerations for borrowers 

• financial goals: assess your long-term financial plans and stability 
• market conditions: be aware of potential changes in interest rates 

Some home loan providers do not provide certain short-term mortgages. It is important for you to do your research, as the availability of current 1-year fixed mortgage rates and other similar products depend on the mortgage market. 

You can contact your current lender to find out what their shortest fixed mortgage rates are. Seeking guidance from a mortgage adviser may help you understand the mortgage industry and your financial needs better.