Want a home

loan that
gives you
certainty?

Fixed Rate
Home Loan guide

Fix your home loan for a period of time

so you have the confidence to budget
accurately, plan ahead and have the
certainty to know exactly what your
repayments will be.

This guide will help you understand the

Fixed Rate Home Loan and important
information to consider before applying.

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Key considerations for Fixed Rate Home
Loans

Minimum Maximum Loan Amount Fixed Rate Loan Redraw Everyday

Loan Amount Periods Term Facility Offset account

$10,000 Based on the security property 1 to 5 years 1 to 30 Not available during fixed rate
and your borrowing capacity years period.

Eligibility
• Available to Individuals, non-trading Companies and/or Family/Unit/Hybrid Trusts.

What you can use the loan for What you can’t use the loan for

• Owner Occupied or Investment property purchase • Business purposes

• Refinance • Bridging loan
• Home renovations • Building and construction loans
• Consolidation of personal debt • Off the plan purchases
• Purchase of land
• Personal needs
• Personal investments

What you’ll get

• You have the certainty of knowing you are protected from interest rate rises during your chosen fixed rate
period.
• Know exactly what your repayments will be – giving you confidence to budget accurately and plan ahead with
certainty.
• You can make additional payments of up to $10,000 for each year of your fixed loan, without incurring an
Early Repayment Adjustment (ERA) and an Administrative Fee (excluding interest in advance periods). These
additional payments aren’t available through redraw until after your fixed rate period expires. We count a year
as 12 months from the date you commence your fixed rate period and every 12 months after that.
• You can switch some aspects of your loan that won’t be considered a break and incur an ERA. Some of these
include:
- Changing your repayment type (e.g. from Interest Only to Principal and Interest).
- Changing your repayment frequency (e.g. from monthly to fortnightly or weekly).
• Ability to split your loan balance into multiple loan accounts and take advantage of both fixed and variable
rate home loans (no ERA applies if the split is selected at loan origination). This gives you the flexibility to
structure your home loan to suit your individual needs by choosing the loan amount, loan type, loan term and
repayment structure for each loan.
• For eligible Owner Occupied home loans, Home Loan Compassionate Care is complimentary protection
that helps support you by paying your home loan repayments for around 12 months if you, your spouse or
dependant passes away or is medically certified with a terminal illness^.

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 Trade-offs
This loan might not be right for you if:
• You want your interest rate and repayments to vary with variable interest rate movements (up or down).
• Within the fixed rate term you think you might sell your property, make large repayments, top up your loan or
switch to a variable rate home loan. If this happens you may have to pay an ERA and an Administrative fee.
• You want to benefit from interest offset accounts (such as the Everyday Offset account) or access your redraw
during a fixed rate period. No interest offset account or access to a redraw facility is available while you’re in a
fixed rate period.
• You’re planning on making additional repayments exceeding $10,000 in each year of your fixed loan. You may
have to pay an ERA and an Administrative fee.
For more information about Early Repayment Adjustment (ERA) go to commbank.com.au/era

Financial
• Our fixed interest rates vary depending on whether:
- Your loan is an owner occupied or investment home loan;
- You make Principal and Interest or Interest Only repayments;
- The length of the fixed rate period; or
- You choose to apply for a Wealth Package (eligibility conditions apply).
For current interest rates go to commbank.com.au/home-loans/interest-rates
• The fixed interest rate will begin from your home loan funding date or from when we process your switch to a
Fixed Rate Home Loan and will apply for the duration of the fixed rate period.
• If you have a Fixed Rate Investment Home Loan with Interest Only payments, you’ll have the option to prepay
interest 12 months in advance, known as ‘Interest in Advance’. If you choose this option, there’s only one fixed
interest rate option, being the Interest Only rate less a 0.20% p.a. discount.
• At the end of a fixed rate period:
- Your home loan will switch to a Standard Variable Rate Home loan;
- The interest rate will revert to the Standard Variable Rate applicable to your loan and repayment type
at the time, less any wealth package discount. This may be a higher interest rate and may result in an
increase in your minimum required repayments; and
- You have the option to re-fix your home loan by switching to another Fixed Rate Home Loan.
• You can apply to top up your home loan by an additional $10,000 or more – subject to equity in your property
and our approval. However it’s important to know that a top up would break your fixed rate period and an ERA
and an Administrative fee may apply. Top ups are not available during an Interest in Advance period.

TIP: With a Wealth Package you’ll get access to interest rate discounts on your eligible
home loan(s) and fee waivers on selected credit cards. For more information go to
commbank.com.au/wealthpackage

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 Other considerations
• When buying a property, you generally require a deposit of at least 20% of the purchase price, plus enough to
cover the additional upfront costs such as stamp duty and legal fees. If you don’t have the full deposit amount
required, you may need to pay Lenders Mortgage Insurance (LMI) or Low Deposit Premium (LDP). These are
one off non-refundable, non-transferable costs and added to your home loan. The circumstances of your home
loan will determine whether a loan will incur LMI or LDP.
For more information go to commbank.com.au/home-loans/lenders-mortgage-insurance

TIP: If the fixed interest rate changes

between the disclosure date on your loan
contract and the loan funding date, the
applicable fixed interest rate on your loan
will be the rate at the date of your loan
funding – which could be a higher (or
lower) rate.
At the time of your loan application you
can request for a Rate Lock. Rate Lock
can guarantee your fixed interest rate (for
your chosen fixed rate period) for up to
90 days, for a non-refundable fee. You can
ask us to break the rate lock (for example,
if rates go down) and revert to the rates
available on the funding date. Speak to
your Home Lending Specialist or Broker
for more information.

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 Repayment Options

There is more than one way to repay your home loan.

Repayment type

Principal and Interest (P&I) Interest Only (IO)

Pay your home loan balance and the interest Pay just the interest on your home loan for a
limited time
Each time you pay the minimum required Each time you make a payment you will only pay
repayment, you’re contributing to paying off off accrued interest – so none of the principal loan
the original loan balance (principal) and interest balance is paid off. Once the Interest Only period
accrued. ends, your repayments will automatically switch to
Principal and Interest for the remainder of the loan
term which will increase your minimum required
repayment.
The maximum total Interest Only period over the
life of the loan is:
• 5 years for an Owner Occupied home loan; and
• 10 years for an Investment Home loan
(maximum of 5 years at any one time).
Interest Only payments are not available within the
last 5 years of your contracted loan term.

Key considerations

• You’ll have a lower interest rate when compared • You’ll have a higher interest rate when
to the interest rate charged on Interest Only compared to the interest rate charged on
payments. Principal and Interest repayments.
• You’ll pay less interest over the life of the loan. • You’ll pay more interest over the life of the loan
– this is because you aren’t reducing the loan
balance during an Interest Only period.
• Your minimum required repayment will be
lower for the Interest Only period, however
it will increase at the end of the Interest Only
period. Your minimum required repayment will
be higher than if you’d chosen Principal and
Interest repayments for the life of your loan, as
the amount you have borrowed will need to be
paid back over a shorter timeframe.
• Applying for Interest Only payments is subject
to approval.

Repayment frequency options

Weekly Fortnightly Monthly

For P&I loans only For P&I loans only For all loan types

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 How does it work?
Here’s an example1 to help explain the difference between our repayment options.

Meet Kendall
Kendall has taken out a $500,000 home loan with an initial 5 year fixed rate
period, and the remaining 25 years as a Standard Variable Rate Home Loan.
She is considering her repayment options.

Scenario 1 - Principal and Scenario 2 - Interest

Interest repayment Only payment

Kendall chooses to make Principal and Kendall chooses to make Interest Only
Interest repayments over the life of payments during her 5 year fixed rate
her home loan. period.
Her interest rate is 3.49% p.a. and Her interest rate is 3.99% p.a. and her
her minimum required repayments minimum required payments remain
remain constant at $2,243 per month constant at $1,663 per month for the 5
for the 5 year fixed rate period. year fixed rate and Interest Only period.

After her 5 year fixed rate period After her 5 year fixed rate and Interest
ends, her loan switches to a Standard Only period ends, her loan switches to
Variable Rate Home Loan with a a Standard Variable Rate Home Loan
variable interest rate of 4.2% p.a. for with a variable interest rate of 4.2% p.a.
the remaining 25 years. for the remaining 25 years.

Her Principal and Interest repayments Her Principal and Interest repayments
increase to $2,417 per month for the increase to $2,695 per month because
remaining 25 years of her loan. Kendall is now paying her original loan
balance over 25 years and not 30.
Minimum Monthly Required Repayment ($)

Minimum Monthly Required Repayment ($)

2500 2500

2000 2000
$2417 Principal $2695 Principal
and Interest and Interest
1500 1500
repayments on a repayments on a
monthly basis for monthly basis for
1000 the remaining 25 1000 the remaining 25
years of the home years of the home
loan, as she is now loan, as she is
500 on a Standard 500 now on a
Variable Rate Standard Variable
Home Loan. Rate Home Loan.
5 10 15 20 25 30 5 10 15 20 25 30
Loan Term (Years) Loan Term (Years)

*After 5 years of Principal and Interest repayments, *After 5 years of Interest Only payments, Kendall has a
Kendall has a remaining home loan balance of remaining home loan balance of $500,000. Her home
$448,408. loan balance has not reduced, and she now needs to
repay it over 25 years.

Kendall pays in total $859,545 Kendall pays in total $908,164 over

over the life of her loan. the life of her loan, an additional
$48,619 in interest.

1
The example is for illustrative purposes only. It assumes interest rates don’t change over the life of the loan and are calculated on the rate that applies for initial period of the loan. Interest rates may change at any time.
The calculations do not take into account fees, charges or other amounts that may be charged to your loan (such as establishment, monthly services fees or stamp duty). No additional repayments and redraws are made.
Standard fees and charges are payable

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 If you have an investment property we also offer Interest in Advance payment option for Fixed Rate
Home Loans.

This means you pay 12 months of interest in one lump sum before the Interest in Advance period starts.
Paying Interest in Advance can save you from having to make monthly payments during the year.
The Interest in Advance period must be the same as the fixed rate and Interest Only periods. During the
Interest in Advance period, you won’t be able to reduce the principal amount of your loan. If you choose to
repay the loan, or switch to another loan type, you may be charged an ERA and an Administrative fee.
You should talk to your accountant or financial advisor to see if prepaying interest is right for your tax needs
and investment strategy.

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Common Questions
Should I break my The decision is yours. It’s important to consider how this may affect you financially and what
Fixed Rate Home your options are. Breaking the fixed period on your home loan for a lower advertised rate
Loan? may be appealing. However this can have large financial implications based on the ERA
versus the potential interest savings on a lower interest rate.
We highly recommend that you:
• Discuss your options with your Home Lending Specialist or Broker; and
• Seek independent legal and/or financial advice to understand the impact on your
financial situation.

How can I top up If you are looking to top up your home loan to access more money, you may want to
my loan without consider applying for a separate loan. This means you will have a new home loan for the
being charged an extra amount required (additional fees and charges may apply) without affecting your
ERA? current fixed rate home loan. Standard lending criteria will apply.

We’re here to help

If you have any questions or want more information:

Book an appointment with a Home Lending Specialist at

commbank.com.au/appointment or contact your Broker.

Call us on 13 2224 (8am - 8pm any day)

Visit commbank.com.au/homeloans

Things you should know: Everyday Offset is a feature of our Complete Access Transaction account which is linked to an eligible home loan, and accountholder(s) must also be accountholders of the linked home loan.
Interest is not charged on the part of the Home Loan balance equal to the Transaction account. Full terms and conditions for transactions and savings accounts mentioned and our Financial Services Guide are available
online or from any branch of the Commonwealth Bank. If you have a complaint in respect of this product, the Commonwealth Bank’s dispute resolution service can be accessed on 13 2221. This guide doesn’t consider your
individual objectives, financial situation or needs. Before basing any decisions on this information please:
• Consider its appropriateness to your circumstances.
• Consider obtaining professional advice specific to your needs, including financial, taxation and legal advice.
Loan applications are subject to credit approval and any loan offer includes full terms and conditions. Fees and charges apply – see our fees and charges brochure. All examples and scenarios are illustrative only.
^Age and loan eligibility requirements and other limitations and exclusions apply. For more information, go to commbank.com.au/compassionatecare
Home Loan Compassionate Care is underpinned by a group policy held by us with the insurer, The Colonial Mutual Life Assurance Society Limited (CMLA), ABN 12 004 021 809, AFSL 235035. CMLA is part of the AIA
group. Home Loan Compassionate Care may be terminated or varied at any time. This guide is subject to change without notice.
Commonwealth Bank of Australia ABN 48 123 123 124, AFSL & Australian credit licence number 234945.
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