Compare 5-year fixed rate interest-only investment home loans
- Compare 5-year fixed rate interest-only investor home loans from a range of providers based on rates, fees and features.
5-year fixed rate interest-only investment home loan repayments compared
The table below shows a selection of 5-year fixed interest-only investement home loan rates (based on principal & interest repayments) for a $600,000 loan with monthly repayments. The table is sorted by lowest interest rate.
| Lender | Product | Interest Rate | Comparison Rate | Repayments | Features | Exit Fees | Upfront Fees | Ongoing Fees |
|---|---|---|---|---|---|---|---|---|
Macquarie Bank | Offset Home Loan Package Fixed 5yr | 0.35% | Initial Repayment: 0 1 Year Interest Payable: $0.00 2 Year Interest Payable: $0.00 3 Year Interest Payable: $0.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $350.00 Legal/Solicitor Fee : $363.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $110.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 | |
ING | 5 Year Fixed Rate | 6.49% | 6.40% | Initial Repayment: $3,245.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $77,880.00 3 Year Interest Payable: $116,820.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 80% | Discharge Fee: $0.00 Early Repayment Fee: Potential Break Fees | Establishment Fee: $499.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $299.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
UBank | Flex 5 Year Fixed | 6.55% | 6.71% | Initial Repayment: $3,275.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $78,600.00 3 Year Interest Payable: $117,900.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $250.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $250.00 Annual Package Fee: $0.00 |
Qudos Bank | Fixed Rate Home Loan 5yr | 6.64% | 6.64% | Initial Repayment: $3,320.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $79,680.00 3 Year Interest Payable: $119,520.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
AMP | Professional Package Fixed Rate Loan 5 yr | 6.69% | 7.08% | Initial Repayment: $3,345.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $80,280.00 3 Year Interest Payable: $120,420.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $295.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $349.00 |
Adelaide Bank | 5 Year Fixed | 6.74% | 6.60% | Initial Repayment: $3,370.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $80,880.00 3 Year Interest Payable: $121,320.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $299.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $199.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Bankwest | Complete Fixed Home Loan 5yr | 6.79% | 7.74% | Initial Repayment: $3,395.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $81,480.00 3 Year Interest Payable: $122,220.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: Yes Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $250.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $40.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
Commonwealth Bank | Fixed Rate Home Loans 5yr | 6.89% | 8.21% | Initial Repayment: $3,445.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $82,680.00 3 Year Interest Payable: $124,020.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $200.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
Suncorp | Home Package Plus Fixed Rate Home Loan 5yr | 6.94% | 7.03% | Initial Repayment: $3,470.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $83,280.00 3 Year Interest Payable: $124,920.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $150.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $375.00 |
Westpac | Fixed Rate Investment Property Loan 5yr | 6.99% | 8.05% | Initial Repayment: $3,495.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $83,880.00 3 Year Interest Payable: $125,820.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
Bank Of Melbourne | Fixed Rate Home Loan 5yr | 6.99% | 8.07% | Initial Repayment: $3,495.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $83,880.00 3 Year Interest Payable: $125,820.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: Yes Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $100.00 Valuation Fee: $164.00 Additional Valuation Fee: $164.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
St George Bank | Fixed Rate Home Loan 5yr | 6.99% | 8.07% | Initial Repayment: $3,495.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $83,880.00 3 Year Interest Payable: $125,820.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: Yes Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $100.00 Valuation Fee: $0.00 Additional Valuation Fee: $164.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
Bank SA | Fixed Rate Home Loan 5yr | 6.99% | 8.04% | Initial Repayment: $3,495.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $83,880.00 3 Year Interest Payable: $125,820.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: Yes Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: N/A | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $100.00 Valuation Fee: $0.00 Additional Valuation Fee: $164.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $395.00 |
Firstmac | Fixed 5 Year | 7.04% | 7.26% | Initial Repayment: $3,520.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $84,480.00 3 Year Interest Payable: $126,720.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 80% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $200.00 Settlement Fee: $300.00 Valuation Fee: $220.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
ANZ Bank | Fixed Rate Home Loan 5yr | 7.14% | 7.55% | Initial Repayment: $3,570.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $85,680.00 3 Year Interest Payable: $128,520.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: No Partial Offset: No Redraw: No Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 90% | Discharge Fee: $0.00 Early Repayment Fee: May be payable if you choose to make additional repayments, repay your fixed loan (in part or full) or switch to another fixed or variable interest rate before the end of your fixed rate period | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $160.00 Valuation Fee: $150.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $50.00 | Account Service fee: $0.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
NAB | Tailored Home Loan - Fixed Interest Rate 5yr | 7.14% | 7.30% | Initial Repayment: $3,570.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $85,680.00 3 Year Interest Payable: $128,520.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: Yes Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $0.00 Legal/Solicitor Fee : $0.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $8.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Pepper Money | Essential (Full Doc) - 5 Year Fixed | 7.74% | 7.76% | Initial Repayment: $3,870.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $92,880.00 3 Year Interest Payable: $139,320.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $599.00 Legal/Solicitor Fee : $330.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $10.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Pepper | Prime Solutions (Full Doc) - 5 Yr Fixed | 7.74% | 7.76% | Initial Repayment: $3,870.00 1 Year Interest Payable: $0.00 2 Year Interest Payable: $0.00 3 Year Interest Payable: $0.00 Total Interest Payable: $0.00 Total Amount to be Repaid: $0.00 | Extra Repayment: Yes Offset: Yes Partial Offset: No Redraw: Yes Repayment Holiday: No Splitting: Yes Maximum LVR - with LMI: 95% | Discharge Fee: $0.00 Early Repayment Fee: $0.00 | Establishment Fee: $599.00 Legal/Solicitor Fee : $330.00 Settlement Fee: $0.00 Valuation Fee: $0.00 Additional Valuation Fee: $0.00 Settlement Administration Fee: $0.00 Title Search Fee: $0.00 | Account Service fee: $10.00 Annual Service Fee: $0.00 Annual Package Fee: $0.00 |
Fixed rate interest-only home loans explained
Some investors choose to combine a fixed interest rate with interest-only repayments on their investment property loan. To understand why this type of loan could be worth considering, let’s take a look at each of the main aspects and how they work.
How does a 5-year fixed rate investment home loan work?
A 5-year fixed rate investment home loan means you ‘lock in’ your interest rate for that period, before reverting to a variable rate (unless you refinance). Your repayments will be fixed during that time and you’ll be protected from sudden rate rises.
The main downside is that you won’t benefit from potential rate cuts or have access to as many loan features as you typically would with a variable rate investment home loan.
Still, investors seeking certainty may prefer an investment home loan with a fixed interest rate and predictable repayments than one with bells and whistles.
What is an interest-only investment loan?
Interest-only is a repayment option on your investment home loan where you pay the interest component for a set period (up to five years), not the loan balance.
Interest payments on investor home loans are tax deductible. Many investors choose interest-only repayments to maximise their tax deduction while lowering their mortgage repayments. This can free up cashflow to re-invest into the property and build equity, or invest elsewhere.
It’s important to note that during the interest-only period, you're not reducing the principal balance, which means you'll need a plan to repay the loan amount eventually.
At the end of the interest-only period, investors generally have the following options:
- Switch to principal and interest (P&I) repayments to pay both the loan principal and interest, resulting in higher repayments
- Refinance to a new interest-only period (and further delay principal repayments)
- Refinance to access usable equity in the property (if any)
- Sell the property for a profit at the end of the interest-only period
"When choosing an investment loan, you should always have an exit strategy in line with the loan product you choose. For example, if you're planning on purchasing and selling your property within five years and you're expecting significant capital growth, then you could opt for a five-year interest-only home loan. Each investor will have a different goal, so when in doubt, speak to a financial adviser or mortgage broker about your options."
Mansour Soltani, Money.com.au's home loan expert
What is a good 5-year fixed rate on an interest-only investment home loan?
The best 5-year fixed investment loan with interest-only repayments rates will depend on your deposit (or equity), loan amount and credit profile.
To give you an idea of what’s available right now:
- The lowest 5-year fixed rate for interest-only investment home loans on Money’s database is: 0% (comparison rate 0.35%)
- The average 5-year fixed rate on interest-only investment home loans on Money’s database: 6.58%
Investment home loan features
Fixed rate home loans have limited flexibility, but still come with useful features for investors, including:
- Extra repayments: Make additional repayments on top of your minimum mortgage repayments. Some fixed rate home loans may have a limit on extra repayments or charge fees for the privilege. Investors can make extra repayments on their home loan to pay it off faster and save on interest.
- Redraw facility: Allows you to withdraw any extra repayments you've made on your home loan. Investors can use their redraw facility to finance renovations on the property, fund other investments or cover expenses. Redraw fees may apply.
- Offset account: An offset account is a transaction account linked to your investor home loan account to reduce interest payable. The balance in your offset account goes towards offsetting your mortgage balance and interest. Investors can use the money in their offset account as they please. Generally, the lowest-rate fixed loans tend not to offer offset accounts, and if they do, there will be a higher interest rate or fee applied.
- Repayment frequency: You can choose your repayment frequency (e.g. weekly, fortnightly, or monthly) or opt for an interest-only repayment option for a period of time.
Should you choose a fixed or variable rate for your investment home loan?
“It really depends on the market and what rates you can access. If the rates are historically high, fixing for multiple years mightn’t be a great option. This is because there are significant break costs if the rates drop and you refinance. If you want peace of mind and are adamant about fixing your rate, then you could consider splitting your home loan 50/50, fixed and variable. That way, you get the best of both worlds and hedge your bets.”
Mansour Soltani, Money.com.au's home loan expert
How to compare investment property home loans
1
Look at the advertised rate
Compare the advertised rate of different investor home loans to estimate your interest-only monthly repayments. While a low interest rate is important, it's not the only factor to consider. Other aspects like loan features, fees, and your loan term will also impact your hip pocket.
2
Check the comparison rate
You must also look at the comparison rate, which shows the true cost of a home loan, including interest and fees. Your actual individual rate may differ depending on your loan-to-value ratio (LVR) and loan amount.
3
Consider home loan fees
Some of your home loan fees may be tax deductible, but you should still look at an investment loan with lower fees and a simple fee structure to make budgeting and record keeping easier.
4
Choose the right home loan features
Property investors often look for a home loan with an offset account (or multiple offset accounts) to save on interest and a redraw facility to access additional repayments. These are the most valuable home loan features for an investor. Keep in mind fixed rate investment home loans don’t come with as many features as their variable rate counterparts.
How long can you fix an investment home loan for?
Lenders typically offer fixed rate terms on investment home loans of one to five years. Check out our guides on:
FAQs about investment home loans
What is an investment home loan?
You can use an investment home loan to buy an investment property. This can include a home you want to rent out or real estate you plan to earn a return on. Interest rates for investment home loans are usually higher than those for owner-occupier home loans (for buyers who buy a home to live in). Besides that, they both work the same way.
How much deposit do I need for an investment property loan?
You generally need a deposit of 20% of the property's value (or usable equity) to avoid paying lender's mortgage insurance (LMI) on an investment home loan. Some lenders will accept a deposit as low as 5%, although it may not get you the best rate. The bigger your deposit, the lower your LVR and the better your interest rate. Your property's value will be based on the lender's valuation.
What is usable equity?
Usable equity is the equity in your home you can access and borrow against, which is lower than your total home equity. Investors may refinance their home loan to access equity for renovations, debt consolidation or other investments. Lenders calculate usable equity as 80% of property’s value, minus the loan balance.
Shopping around for the right loan can save you thousands of dollars in interest and fees.
Home Loans guides and resources
What's the next step on your property journey? Our home loan guides will help you navigate the road ahead, whether you're buying, building or looking to save on an existing loan.
Written by
Senior Finance Writer
Megan Birot
Reviewed by
Home Loans Expert
Mansour Soltani
AS FEATURED IN
