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Compare some of the Best Mortgage Rates* in Australia

Compare home loan rates from a wide range of Australian lenders and find a mortgage and interest rate that best suit your needs.

Compare some of the Best Mortgage Rates* in Australia

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Happy young couple getting keys of their new house. Close up of female hand receiving keys from house broker. Closeup of the hand of a real estate agent who give the house keys to a woman while her boyfriend signing a contract.

While it is important to note that there is no one-size-fits-all mortgage, being able to determine your needs and match them to a product is what will help you find your own best mortgage. With the variety of home loans on offer, it is also highly likely that there will be several mortgages available that fit your purposes, so once you know what to compare and what you’re looking for, you will be able to identify some good options.

Using our rate table as a comparison tool will allow you to filter mortgages by many different features, to give you the best idea of which mortgages could be suitable for your needs.

How do I decide which is the best mortgage for me?

There are various aspects of a home loan you'll need to consider when weighing up whether it's the right one for you. Among the questions you should be asking yourself are:

  • How long will I need to take out the loan for?
  • Is it a fixed or variable rate product?
  • What will my repayments be?
  • Are there any restrictions I need to be aware of?
  • Can I sustain a good lifestyle while paying off this mortgage?
  • Are there any added fees that I need to factor into my calculations?
  • Can I make any additional repayments if I want to?

Remember that while asking for advice from friends and family might be useful, it shouldn't form the basis of finding the best mortgage for your requirements. Everyone is different, which is why your mortgage comparison is so important.

Here is an explanation of some of the key factors that will assist you in determining what to look for when attempting to find the most suitable mortgage:

Interest rate

One of the first considerations to take into account before you look for a mortgage is whether you are looking for a variable or fixed interest rate. Most mortgages are based on a variable interest rate that will fluctuate over time with the Reserve Bank of Australia cash rate. There are, however, some mortgages available that will allow you to lock in a low interest rate for a period of time, which will assist you in planning for future repayments. Once you've decided on which type of loan you would like, it's time to start comparing interest rates.

During this process you will most likely notice that many of the lowest rates on the market are available only to borrowers with a large deposit, as they are considered to be less risky by lenders. For this reason, there is no best mortgage for all borrowers, as some borrowers will have access to lower rates depending on the size of their deposit and also whether they are an owner-occupier or investor. This is why using the customisable search function of our rate table will assist in revealing the ideal mortgages for your circumstances.

Fees

Another consideration in looking for a good home loan will be the fees that are charged. There are many different types of fees to be aware of when looking for a home loan. These can include:

  • establishment fees;
  • settlement fees;
  • fees for using features such as an offset account of redraw facility, and;
  • fees associated with making extra repayments.

Unfortunately, that doesn’t even cover the whole gamut of fees out there, so researching potential loan options thoroughly and enquiring about the fees they charge should be a must when looking for the best mortgage for your needs.

It is also possible to find loans that charge relatively little to no fees, so don’t think that you need to be locked into paying thousands in unnecessary costs. You can also negotiate with a lender when you are refinancing or taking out a new loan to waive some of the upfront costs. If they want your business, and they usually do, they will be willing to give you a discount to keep you happy. For this reason, the most suitable mortgage for your needs may not necessarily be exactly what’s advertised online, but perhaps a tailored loan arranged by contacting a lender.

Features

When trying to figure out what the best mortgage looks like for your needs, you should also consider the impact that different features can have on your home loan. For example, choosing a loan with an offset account can assist you in reducing the amount of interest you pay over the life of the loan. The account functions as a transaction account linked to your mortgage, and keeping your spare cash in there will minimise the principal amount you are charged interest on.

Another feature that will assist you in reducing the amount of interest charged on your loan will be the extra repayments feature that allows you to go above and beyond your regular repayments to pay down your loan faster. By reducing the principal amount owed on your loan at the fastest rate possible, you will potentially cut thousands off your total interest bill.

Some mortgages offer the option to make interest-only repayments for a certain period. This may not be the best option for all borrowers, as it will end up costing the borrower more in the long term, but it does have advantages for certain people. For example, if you are a first home buyer, you may like to take advantage of slightly lower monthly repayments at the beginning of your loan to ease you into the routine. Alternatively, borrowers who experience an unexpected lifestyle change, like a partner losing their job or increased medical bills, may want to drop payments down to an interest-only level while they adjust their finances.

A common feature that will allow you to take advantage of the best parts of different mortgages is opting for a split loan. A split loan is a mortgage that has part of the interest charged on a fixed rate and another portion on a variable rate. This style of mortgage is intended for borrowers who can’t decide between a fixed or variable loan and want to take advantage of the benefits that each has to offer.

These are only some of the many features that are available with different types of mortgages and lenders. When deciding what the best mortgage looks like for you, you should take into account the type of features that you think are most likely to assist you in future. Whether these are features that will help you save money on interest in the long run, or allow you to be flexible with repayments, finding out more about features can help you narrow down what will be the ideal mortgage for you.

Making repayments

During your search for a new home loan you should use a mortgage calculator to estimate how much your monthly repayments will be. This can assist you with budgeting to make sure you can afford the repayments comfortably and perhaps even make some extra repayments along the way. Some loans will allow you to make weekly, fortnightly or monthly repayments, and this flexibility can be helpful in syncing your payments with your pay cycle. The more frequently you make repayments, the more you will be able to save on interest over the life of the loan, as most mortgages calculate interest on a daily basis.

Bank vs non-bank

When searching for a suitable mortgage you may have noticed that most of the lowest rates on the market are often offered by non-bank lenders. For borrowers who have never banked with this type of lender before, you may be wondering what the advantages of taking your mortgage out with them will be.

The most obvious one is a more competitive rate that will most likely stay lower than the Big 4 banks' rates as the smaller lender fights to keep your business. These lenders are often customer-owned, which gives your priorities as a borrower a much bigger role to play in the lender’s decision-making process. Customers of smaller lenders also report being happier with the service provided to them compared to customers of the Big 4 banks.

Still, many borrowers prefer the tried and tested security of the Big 4 banks, which can offer some convenient package deals for borrowers who want to keep all their financial products in the one place. For an annual fee, customers of the Big 4 banks can tie in their transaction account, credit cards and mortgages, and manage them all on the one app. This sort of convenience appeals to many borrowers, and your preference should be factored into your mortgage decision.

Depending on whether you are a first home buyer or refinancer, the ideal mortgage for you will vary. One of the major differences between these borrower types is that a refinancer often has a larger deposit available in the form of equity built into their current property. These types of borrowers can harness the power of that equity to get the lowest interest rates on the market. These rock bottom rates are often on offer to borrowers who are borrowing less than 80 per cent of the property value, which rules out many first home buyers with small deposits.

There are, however, certain home loans that profess to cater to first home buyers specifically by offering honeymoon interest rates. These deals offer customers a lower introductory interest rate for a certain time period before it reverts to a higher rate. This revert rate is often much higher than what other loans on the market are offering, and over the life of the loan borrowers will end up paying more in interest than if they had opted for a loan without the honeymoon rate. Checking the comparison rate of a home loan, as well as the interest rate, will give you a better idea of its overall value, as it includes fees and revert rates into the calculation.

What are the next steps in finding the best mortgage?

If you’re feeling confident to begin your search for a suitable mortgage, you can use our comparison table to customise your search and look at some viable options. It's also a good idea to take a look at the Home Loan Guide, which will give you further information on what you should consider when choosing the most suitable mortgage for your needs. The guide expands on the different features and fees included in a mortgage, and will also give you information relevant to the type of borrower you are. Whether you are a first home buyer, refinancer or investor, your needs will be slightly different, and different mortgages may be more suitable.

Once you think that you've found the right product, it's time to sit down and take a look at the terms and conditions. There will be plenty of fine print to go through, and it's critical that you understand it as thoroughly as possible before signing up for the product. Make sure you look at the product disclosure statement for the loan you are interested in and make a note of any fees you will be expected to pay. This way, you can avoid any unpleasant surprises further down the line!

Everyone's situation is different, which is why you must put in the necessary legwork before making that all-important home loan application. While carrying out a mortgage application might seem difficult, with the right preparation and research, it could be easier than you think. The most important thing to remember is that it will take a combination of interest rate, features, fees and lender to make your ideal mortgage, and that what works for one person may not work for you.

Comparison will be an important part of your decision-making process, so make sure you take the time to understand the market and what's on offer before making a decision. By having a thorough knowledge of the loans that are on offer, from banks and non-bank lenders, you will be in a better position to choose a reasonable interest rate and avoid unnecessary fees.

*The phrase ‘some of the best’ is not a recommendation or rating of products. This page compares a range of home loans from selected providers, not all products or providers are included in the comparison. No home loan is one size fits all. The best home loan for you will not be the best home loan for someone else. As a result, it's worth getting advice on whether a product is right for you before committing. 

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