Commbank Fixed Rate Calculator

Estimate your fixed rate home loan repayments with Commonwealth Bank’s current rates

Comprehensive Guide to Commonwealth Bank Fixed Rate Home Loans

When considering a home loan with Commonwealth Bank (CommBank), one of the most important decisions you’ll make is whether to choose a fixed rate, variable rate, or split rate loan. This guide will help you understand how CommBank’s fixed rate home loans work, their benefits and drawbacks, and how to use our calculator to make informed financial decisions.

What is a Fixed Rate Home Loan?

A fixed rate home loan is a mortgage where the interest rate remains constant for a predetermined period, typically between 1 to 10 years. During this fixed term:

• Your interest rate won’t change, regardless of market fluctuations
• Your repayments remain consistent (for principal & interest loans)
• You’re protected from rate rises but won’t benefit from rate cuts

Current CommBank Fixed Rate Offerings (as of 2023)

CommBank typically offers fixed rates for the following terms. Note that these rates can change frequently based on economic conditions:

Fixed Term	Owner Occupier Rate (p.a.)	Investor Rate (p.a.)	Comparison Rate*
1 Year	6.09%	6.39%	6.15%
2 Years	5.99%	6.29%	6.04%
3 Years	5.89%	6.19%	5.94%
4 Years	5.99%	6.29%	6.04%
5 Years	6.09%	6.39%	6.14%

*Comparison rates are calculated on a $150,000 loan over 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Pros and Cons of Fixed Rate Home Loans

Advantages

1. Repayment certainty – Your repayments stay the same during the fixed term, making budgeting easier
2. Protection from rate rises – If interest rates increase, your rate remains unchanged
3. Easier financial planning – Consistent repayments help with long-term financial planning
4. Potential for extra features – Some fixed loans offer offset accounts or redraw facilities

Disadvantages

1. Less flexibility – Fixed loans often have restrictions on extra repayments
2. Break costs – Significant fees may apply if you refinance or sell during the fixed term
3. No benefit from rate cuts – If rates drop, your repayments stay the same
4. Potentially higher rates – Fixed rates are sometimes higher than variable rates

How to Use Our CommBank Fixed Rate Calculator

Our calculator helps you estimate your repayments for a CommBank fixed rate home loan. Here’s how to use it effectively:

1. Loan Amount – Enter the amount you wish to borrow. This should be the purchase price minus your deposit.
2. Loan Term – Select how long you want to fix your rate (1-10 years). Remember, after this period your loan will typically revert to a variable rate.
3. Interest Rate – Enter the current fixed rate for your chosen term. You can find these on CommBank’s website.
4. Repayment Type – Choose between:
   • Principal & Interest – Pay both the loan amount and interest (most common)
   • Interest Only – Pay only the interest for a set period (typically 1-5 years)
5. Repayment Frequency – Select how often you’ll make repayments (weekly, fortnightly, or monthly).

After entering these details, click “Calculate Repayments” to see your estimated repayment amount, total interest paid, and total loan cost over the fixed term.

Fixed vs Variable Rate Loans: Which is Right for You?

Choosing between fixed and variable rates depends on your financial situation and risk tolerance. Here’s a comparison:

Feature	Fixed Rate Loan	Variable Rate Loan
Interest Rate	Locked for fixed term	Can change at any time
Repayment Amount	Stays the same	Can increase or decrease
Extra Repayments	Often limited (usually $10k-$30k/year)	Typically unlimited
Offset Account	Sometimes available	Usually available
Redraw Facility	Sometimes available	Usually available
Break Costs	Can be substantial	None or minimal
Rate Discounts	Less common	More common (loyalty discounts)

When to Consider a Fixed Rate Loan

A fixed rate loan might be suitable if:

• You want certainty in your repayments for budgeting purposes
• You believe interest rates will rise in the near future
• You’re on a tight budget and can’t afford repayment increases
• You’re a first-home buyer who wants stability in the early years
• You’re fixing for a short term (1-3 years) during a period of economic uncertainty

Important Considerations Before Fixing Your Rate

Before committing to a fixed rate loan with CommBank, consider these factors:

1. Fixed Rate Period – Most fixed terms are 1-5 years. After this, your loan typically reverts to a higher variable rate unless you refinance.
2. Break Costs – If you sell your property or refinance during the fixed term, you may face significant break fees. These can be thousands of dollars.
3. Repayment Limits – Most fixed loans limit extra repayments (often to $10,000-$30,000 per year). Exceeding this may incur fees.
4. Rate Reversion – After the fixed term ends, your loan will revert to CommBank’s standard variable rate, which is often higher than discounted variable rates.
5. Features – Fixed loans may have fewer features than variable loans (e.g., no offset account or limited redraw).
6. Economic Outlook – Consider the Reserve Bank of Australia’s (RBA) monetary policy and economic forecasts. If rates are expected to fall, fixing might not be advantageous.

How CommBank Calculates Fixed Rate Loan Repayments

CommBank uses the following formula to calculate your minimum repayments for a principal and interest loan:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where:

• M = Monthly repayment amount
• P = Principal loan amount
• i = Monthly interest rate (annual rate divided by 12)
• n = Number of payments (loan term in years × 12)

For example, on a $500,000 loan at 5.99% over 30 years with principal and interest repayments:

• P = $500,000
• i = 0.0599/12 = 0.004991667
• n = 30 × 12 = 360
• M = $500,000 [0.004991667(1.004991667)^360] / [(1.004991667)^360 – 1] = $2,993.70 per month

Government Resources and Financial Advice

Before making any financial decisions regarding home loans, it’s important to consult authoritative sources:

• MoneySmart (ASIC) – The Australian Government’s financial guidance website provides comprehensive information on home loans and mortgages.
• Reserve Bank of Australia – For information on current cash rates and monetary policy that affects home loan interest rates.
• Australian Taxation Office – For information on tax implications of investment properties and home ownership.

For personalized advice, consider consulting a licensed financial adviser who can assess your individual financial situation.

Frequently Asked Questions About CommBank Fixed Rate Loans

Can I make extra repayments on a CommBank fixed rate loan?

Yes, but there are limits. Most CommBank fixed rate loans allow you to make additional repayments of up to $10,000 per year without incurring fees. Some products may allow up to $30,000. Check your specific loan terms.

What happens when my fixed rate period ends?

When your fixed rate term expires, your loan will automatically revert to CommBank’s standard variable rate unless you:

• Fix your rate again for another term
• Refinance to another lender
• Negotiate a new rate with CommBank

The reversion rate is typically higher than discounted variable rates, so it’s important to review your options before your fixed term ends.

Can I refinance during my fixed rate period?

Yes, but you’ll likely incur break costs. These fees compensate the bank for the interest they would have earned if you’d kept the loan for the full fixed term. Break costs can be substantial, sometimes tens of thousands of dollars, so it’s important to consider this before refinancing.

Does CommBank offer split rate loans?

Yes, CommBank offers split rate loans where you can divide your loan between fixed and variable rates. This gives you some certainty with the fixed portion while maintaining flexibility with the variable portion. You can typically split your loan in any proportion (e.g., 50/50, 70/30).

Are there any fees associated with CommBank fixed rate loans?

Common fees may include:

• Application/establishment fee (typically $0-$600)
• Monthly account keeping fee (typically $0-$10)
• Break costs if you exit the fixed term early
• Discharge fee when you pay out the loan

Always check the current fees and charges on CommBank’s website.

Tips for Getting the Best Fixed Rate Deal with CommBank

1. Compare rates regularly – Fixed rates can change frequently. What’s competitive today might not be tomorrow.
2. Consider the comparison rate – This includes both the interest rate and fees, giving you a better idea of the true cost.
3. Negotiate – CommBank may be willing to offer a better rate to win or retain your business, especially if you have a good credit history.
4. Think about the fixed term carefully – Longer fixed terms offer more certainty but may have higher rates and break costs.
5. Plan for the reversion rate – Start thinking about your options 3-6 months before your fixed term ends to avoid automatically rolling onto a higher variable rate.
6. Consider package deals – CommBank’s Wealth Package can offer rate discounts and fee waivers if you meet certain criteria.
7. Check for special offers – CommBank sometimes has cashback offers or rate discounts for new customers.

Alternative Options to CommBank Fixed Rate Loans

While CommBank is one of Australia’s largest lenders, it’s worth considering alternatives:

• Other major banks – ANZ, NAB, and Westpac all offer competitive fixed rate products
• Online lenders – Digital banks like ING, Ubank, or Up often have lower rates and fees
• Credit unions – Member-owned institutions may offer more personalized service and competitive rates
• Mortgage brokers – Can help you compare products across multiple lenders to find the best deal
• Government schemes – First home buyers may be eligible for schemes like the First Home Buyer Assistance Scheme (NSW) or the First Home Loan Deposit Scheme (Federal)

Case Study: Comparing Fixed vs Variable Rates

Let’s compare a $600,000 loan over 30 years with different rate scenarios:

Scenario	Interest Rate	Monthly Repayment	Total Interest	Total Cost
Fixed 3 years at 5.89%	5.89% (fixed)	$3,572	$108,592 (over 3 years)	$600,000 + $108,592
Variable at 6.14%	6.14% (variable)	$3,642	$691,120 (over 30 years)	$600,000 + $691,120
Variable with 0.50% discount (5.64%)	5.64% (variable)	$3,478	$612,080 (over 30 years)	$600,000 + $612,080

This comparison shows that while the fixed rate offers certainty for the first 3 years, a discounted variable rate could save you money over the long term if rates don’t rise significantly. However, if rates were to increase to 7%, the variable rate would become more expensive.

Final Thoughts on CommBank Fixed Rate Loans

Choosing a fixed rate home loan with Commonwealth Bank can provide valuable certainty in your repayments, which is particularly beneficial in times of economic uncertainty or when interest rates are expected to rise. However, it’s crucial to:

• Carefully consider the fixed term length
• Understand all associated fees and limitations
• Plan for what happens when the fixed term ends
• Compare with other lenders to ensure you’re getting a competitive deal
• Consider your personal financial situation and risk tolerance

Our calculator provides a good starting point for estimating your repayments, but we recommend speaking with a CommBank lending specialist or financial adviser to get personalized advice tailored to your situation. Remember that the home loan market is competitive, and what seems like a small difference in interest rates can translate to significant savings over the life of your loan.

For the most current information on CommBank’s fixed rate offerings, always check their official rates page or contact them directly.