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Home loan comparison

Compare top-rated home loans, starting at 5.48% (comparison rate* 6.24%), from over 120 lenders. Quickly find a home loan that may be right for you, whether you’re looking to invest, refinance, or buy a home.

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Sally Tindall
Sally Tindall

Research Director

Alex Ritchie
Alex Ritchie

Personal Finance Editor

Content updated

Product data updated

Loan amount

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Minimum deposit

Loan type & Term

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Default

6.04%

6.04%

$3,011

More detailsclick for more details

Australian Credit Licence 232595

Fees & charges apply

Product info
  • Owner Occupied
  • Variable
  • 30% min deposit
  • P&I

5.85%

6.09%

$2,950

More detailsclick for more details

Australian Credit Licence 237879

Fees & charges apply

Product info
  • Special
  • Owner Occupied
  • Fixed 2 years
  • 10% min deposit
  • P&I

6.29%

6.30%

$3,092

Enquire

Australian Credit Licence 233714

Fees & charges apply

Product info
  • Cashback
  • Owner Occupied
  • Variable
  • 20% min deposit
  • P&I

6.29%

6.20%

$3,092

More detailsclick for more details

Australian Credit Licence 234945

Fees & charges apply

Product info
  • Special
  • Investor
  • Variable
  • 20% min deposit
  • P&I
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What's new in home loans in February 2024?

New data from the Australian Bureau of Statistics (ABS) has found that Australia experienced its slowest inflation growth in two years over the December 2023 quarter. With inflation lower than previously forecast, the prospect of the Reserve Bank of Australia (RBA) board raising the national cash rate at its upcoming February 2024 meeting looks increasingly unlikely.

Economists from leading lenders are forecasting that the RBA could choose to cut the cash rate in the second half of this year, which could deliver some much hoped-for mortgage relief to many Australians, including first home buyers and refinancers. However, no rate predictions can be set in stone, so it’s important to compare home loans and make the best decisions to suit your current needs, goals and financial situation.

Low home loan rates for February

Some of the lowest rates on RateCity at the time of writing include:

This is the comparison rate published by the lender and is on a per annum basis. The comparison rate is calculated for a secured loan for an amount of $150,000 over a 25 year term. 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.

Updated by Mark Bristow on 1 February 2024.

What is a home loan?

A home loan is a significant sum of money that you borrow from a bank or other lender to purchase property. When you take out a home loan, you use your home as security, giving the lender the right to take the property back if you fail to repay the loan. In legal terms, this is known as "mortgaging" your home, which is why a home loan is sometimes called a mortgage. 

Repaying a home loan involves making regular instalments, which include both the borrowed amount and an extra charge known as "interest." 

The interest you're charged on each mortgage repayment is based on your remaining loan amount, also known as your loan principal. The rate at which interest is charged on your home loan principal is expressed as a percentage. Your home loan’s interest rate is effectively the cost of “buying” the money you use to purchase property. 

As home loans are secured by the value of the property, most lenders consider them less risky than most personal loans or business loans, so their interest rates are usually much lower. You can use a mortgage repayment calculator to determine how much your monthly repayments are likely to be for various loan sizes at different rates of interest. 

In addition to the interest rate, lenders commonly impose various fees, such as application fees, annual fees, late payment fees, extra repayment fees, etc. These fees can significantly contribute to the overall cost of your loan. 

If you choose a loan with additional features, like a redraw facility or an offset account, you may need to pay an additional fee or a higher interest rate. However, these features could be highly beneficial for some borrowers in effectively managing their home loan. 

It's crucial to weigh the costs and benefits before committing to a specific loan. While a higher fee or interest rate may seem daunting, the added features could potentially save you money in the long run or offer valuable flexibility. Carefully assess your financial situation and goals to make an informed decision that aligns with your needs. 

Everything you need to know about home loans

When it comes to securing a home loan in Australia, there are various factors to take into account that extend beyond the funds borrowed for acquiring a property. Regardless of whether you're a first-time homebuyer, in the market for a new property, contemplating a loan refinance, or delving into real estate investment, it's crucial to grasp the diverse elements and expenses associated with the loan, which go beyond the initial loan sum. 

Features: extra repayments, redraw facility, offset account, and more

Feature

About

Extra repayments

This involves paying a lump sum onto your mortgage principal (such as when you get a tax refund), or making regular principal and interest repayments that are a bit higher than the required minimum amount. Additional repayments can help to lower your outstanding mortgage principal, potentially lowering your interest charges and helping you pay off your property sooner.

Redraw facility

Access the extra repayments you’ve previously made onto your home loan, putting the cash back in your bank account when you need it. This can be useful if you are paying for renovations, paying for a family holiday or just have an emergency payment you need to make.

Offset account

A linked transaction account to your mortgage, in which funds deposited in the account are included when calculating your home loan’s interest charges. These funds help to ‘offset’ or reduce the amount of interest you pay. 

For example, if you have a $300,000 home loan, and $50,000 saved in your offset account, you’ll be charged interest as if you only owed $250,000 on your mortgage.

Repayment frequency

Lenders typically allow you to choose the frequency of your repayments. You can usually opt to make weekly, fortnightly, or monthly payments, aligning them with your salary schedule for straightforward budgeting.

Changing your repayment frequency could also impact the amount of interest you pay on the loan.  For instance, paying more often, like switching to fortnightly payments, might save you some money.

Mortgage holiday

Some lenders allow you to pause repayments on your home loan for a limited time period in the event of financial hardship. This is also known as a repayment holiday or a mortgage freeze. Depending on your lender, a mortgage holiday may last for up to 6 months. However, some lenders may extend it to up to a year, depending on the circumstances of the borrower.

Considering that a home loan is a long term commitment, having the option to pause your repayments for a few months during the term could help you tide over unexpected emergencies, like loss of job or a serious injury. However, remember that your repayment size could increase at the end of your mortgage holiday, which may restrict your household budget.

Home loan portability

Portability is a home loan feature that allows you to transfer your existing home loan to a new property without the need to refinance. So, if you plan to change homes, you can keep your current loan without going through all the paperwork and processes of getting a new one. 

Incorporating additional features and benefits into your home loan can enhance its value. However, it's important to note that the more features and extras a home loan offers, the higher the likelihood of incurring elevated fees or interest rates. Sometimes, opting for a "no frills" home loan with a low interest rate and zero fees can be a more cost-effective option that aligns better with your requirements.

What is the average interest rate for a home loan?

Home loan interest rates vary across a wide scale, and typically follow the movements of the Reserve Bank of Australia's cash rate. If the cash rate currently sits at, say, 4%, you could expect home loan interest rates to be upwards of this rate. 

As of 31 October 2023, the average variable interest rates in Australia are as follows:

Loan Type Repayment Type  Average 
Owner Occupier Principal and Interest 6.74%
Owner Occupier Interest only 7.24%
Investment Principal and Interest 6.97%
Investment Interest only 7.22%

Data by RateCity (excludes fixed rate home loans). Average interest rates updated on 31 October 2023.

How much will a home loan cost you?

Buying a property often means paying for more than just the house itself. While your deposit plus your loan amount should cover the property’s purchase price, you’ll also need to have enough money saved to cover other upfront costs, such as: 

These costs can vary, and you can use online calculators to estimate how much extra you may need to budget for.

How much money can you borrow?

Your borrowing capacity refers to the total amount of money that you can borrow from a bank or a lender. This figure depends on your individual financial circumstances, resulting in varying capacities for different individuals. Additionally, your borrowing capacity can differ between lenders. Using a borrowing power calculator could help you determine the estimated loan amount that you may be approved for. However, it’s not necessary to borrow the full amount. 

Just because you have a higher borrowing capacity doesn’t mean you must borrow the maximum loan amount. Instead, it could help to take a closer look at your finances to settle on a loan size that you can comfortably repay. A mortgage repayment calculator can help you work out your potential monthly repayments for various loan sizes. Understanding how much you can repay monthly could help you better estimate the loan amount you can comfortably afford.

Generally speaking, you’ll want to keep your mortgage and debt less than four to six times your household income (minus the deposit) to avoid mortgage stress and to boost your chances of approval. 

How much can you afford for a deposit?

Most lenders prefer that a borrower pays an upfront deposit on a property of at least 20% of the purchase price, with the mortgage covering the remainder. That said, it may be possible to get a home loan with a deposit as little as 5%. However, you'll need to discuss these options with your preferred lender to see what options are available to you.

A larger upfront deposit and smaller loan amount may help to make your mortgage repayments more affordable, so you can pay off the property faster and pay less interest in total. But a bigger loan with a lesser deposit means you could spend less time saving and join the property market sooner. 

If your deposit is under 20%, you'll be required to pay Lender’s Mortgage Insurance (LMI), which could potentially add tens of thousands of dollars to your upfront costs. Calculating the costs of LMI can help you work out which home loans you might qualify for.

Does the government help home buyers?

Both the state and federal governments offer a variety of grants and incentives to help home buyers, especially first home buyers. Most state and territory governments offer a First Home Owners Grant (FHOG) or similar incentives (such as discounted or waived stamp duty) to assist borrowers buying their first property.

The federal government’s Home Guarantee Scheme (HGS), previously known as the First Home Loan Deposit Scheme (FHLDS) is a program that allows borrowers to apply for a mortgage with a deposit of just 5% and pay no LMI, as the government will step in to guarantee the remainder of the deposit. 

Keep in mind that there are a limited number of places available in this program each financial year, and only a limited number of lenders are participating in the program. Also, both the borrower(s) and the property being bought will need to satisfy a number of terms and conditions to be eligible.

Another government program that may be useful to home buyers is the First Home Super Saver (FHSS) scheme. This allows borrowers to make extra contributions into their superannuation fund, where you can’t easily access your cash for everyday spending. These contributions can later be withdrawn from your super fund to help cover the cost of your deposit – up to $15,000 of voluntary contributions per financial year, up to a total of $30,0000 in contributions across all years.

How do the big four banks compare?

One starting point for many home buyers will be Australia's biggest banks, also known as "the big four". Responsible for the largest amount of mortgages in Australia, the big four banks include ANZ, Commonwealth Bank, NAB, and Westpac, and are a clear starting point for many home buyers whether they're buying for the first time, second, refinancing, or investing.

ANZ
Lowest ANZ home loan rate

Interest Rate

6.54%

p.a.

Comparison Rate*

6.54%

p.a.

Principal and Interest

NAB
Lowest NAB home loan rate

Interest Rate

6.59%

p.a.

Comparison Rate*

7.45%

p.a.

Principal and Interest

CBA
Lowest CBA home loan rate

Interest Rate

6.49%

p.a.

Comparison Rate*

6.87%

p.a.

Principal and Interest

Westpac
Lowest Westpac home loan rate

Interest Rate

6.49%

p.a.

Comparison Rate*

8%

p.a.

Principal and Interest

How to compare home loans

Comparing home loans can help you find a suitable loan for your property purchase. To start, learn about different home loan types to find options that best suit your requirements. 

1. Research and compare home loan rates and fees

Compare home loan interest rates from various lenders to identify competitive offers. Take note of any fees and closing costs associated with each loan offer. 

2. Calculate your monthly repayments

Use online calculators to compare monthly repayments for each loan. Ensure that the repayments align with your budget and financial capabilities. 

3. Consider additional home loan factors

When comparing home loans, don’t limit your search to the best home loan rates offered by lenders. It’s important to look beyond interest rates and also consider major home loan features that could help you manage your loan better. However, remember to assess the costs associated with these features to make an informed decision. 

4. Choose a loan that suits your specific needs and goals

Once you’ve compared interest rates and features, select a loan that aligns with your long-term financial goals and lifestyle. Remember, the best home loan may not always be the cheapest; there are other important factors to consider besides the interest rate. 

Why is home loan comparison important?

Your home loan is one of the largest and most significant financial commitments of your life. Just as you wouldn't buy the first car you saw at a dealership, you should never apply for the first home loan you see. 

It’s important to choose the home loan that best suits your lifestyle, financial needs and personal goals. Finding the best home loan involves more than just hunting for the lowest interest rates. Comparing loans and looking at the rates, fees, features and benefits of home loans from a variety of different banks and other mortgage lenders can help you work out which mortgage offers are the best for you, and not just the cheapest. 

Even after successfully taking out a home loan, it’s often a good idea to conduct home loan comparisons at regular intervals, to make sure that your mortgage still suits your needs. If you find another home loan with a lower interest rate or features and benefits that better suit your changing circumstances, you may have the option to refinance. 

As you get started on your home loan comparison, consider asking yourself the following questions: 

1. Are you an owner-occupier or an investor?

The home loan you choose will be influenced by the type of borrower you are. As mentioned earlier, the two main types of borrowers in Australia are owner-occupiers and investors. 

Owner-occupied home loans often have lower interest rates than investment loans, as lenders consider owner-occupiers less likely to default on their repayments (and lose the roof over their head). However, investor loans may have more flexible features and benefits that could help property investors better manage their property and their repayments. 

2. What is the advertised rate and comparison rate?

A handy way to compare the total cost of different home loans is to look at both the advertised rate and comparison rate. While the advertised rate is the interest rate charged on the loan, the comparison rate combines the cost of interest plus standard fees and charges into a single percentage figure. This is a great way to get a better understanding of the true cost of a loan. 

3. What are the fees and features of the loan?

Not all of a home loan’s fees and charges are included in its comparison rate. Consider checking for any extra costs, such as application fees, ongoing fees and exit fees, that you may need to pay. 

Further, some mortgage lenders have special offers for new customers, such as interest rate discounts or even cashback offers. You may also be able to take advantage of helpful features, like offset accounts and redraw facilities, which can assist in reducing your interest charges. 

If having a competitive feature or cashback offer is important to you, ensure you factor this into your home loan comparison. 

4. How long would you need to repay the mortgage?

Determining the term of your mortgage is a crucial aspect of the home loan journey. Home loan terms generally span between 20-30 years, and the choice of term significantly impacts your overall expenses. 

Opting for a shorter loan term typically leads to higher monthly repayments but lowers the total interest expenses. On the flip side, longer loan terms often mean more manageable monthly payments but can result in higher overall interest costs over the life of the loan. Additionally, keep in mind that the ideal loan term varies for each individual, and it's crucial to tailor your choice to both your current financial capacity and future goals.

You could use a repayment calculator to work out your monthly repayments for different loan sizes and terms. This tool empowers you to make informed decisions by helping you select a suitable loan term that allows for affordable monthly repayments while also considering your long-term financial goals.

5. How does the home loan compare against the rest?

A quick way to estimate the cost and flexibility of a home loan before you enquire is to look at a comparison table. Comparison tables help you to compare apples with apples, as you can filter down a range of home loan options based on your needs, and view them side by side. This allows you to easily compare your options, and see how they rank based on rates, fees and monthly repayments. 

You can also look at the home loan’s Real Time Rating™ , which more closely indicates a home loan’s overall value. You can also compare some of the top-rated home loans on the RateCity Leaderboards, or look for which mortgages have won a RateCity Gold Award

6. Do you need help from a broker?

Talking to a mortgage broker is one way you can help make sense of the mortgage maze. These home loan experts can look at your finances and recommend mortgage deals that may suit your personal goals and financial needs. 

Brokers can also negotiate on your behalf to help you get a better deal, provide access to exclusive home loan offers, and manage your mortgage application on your behalf, to help save you time and hassle. 

Online home loans: everything you need to know

Where home buyers may have once filled out paper application forms in branch, or sent supporting documentation by fax or express post, today you can manage the entire process from your laptop, tablet or mobile phone.

Some specialist mortgage lenders have shifted to conduct heir entire operation online to better suit the needs of home buyers, and to cut down on overheads. These lenders are entirely online based, and the loans offered are commonly referred to as online home loans. 

As these lenders don’t need to worry about the upkeep costs of maintaining branches or ATMs, or offering other financial products than just home loans, online-only mortgage lenders can often provide new customers with some great rates compared to some of the large banks.

Benefits of online home loans

  • Online-only mortgage lenders generally offer lower interest rates and fees on average compared to bigger banks due to fewer overhead costs.
  • These cost savings make online home loan options attractive for borrowers looking to refinance at a lower interest rate.
  • Online lenders typically roll out innovative technology and financial products well before the big institutions can, providing customers with new and convenient options for managing home loans and personal finances.

Risks of online home loans

  • If you like all your banking products in one place, online mortgage lenders may lack convenience, as they often specialise solely in home loans.
  • Some homeowners rely on face-to-face customer service and online-only lenders do not have physical branches. That being said, they can still be contacted via phone, apps, and email.
  • Big banks and institutions are typically seen as ‘safer’ options, as their sheer size and government support may make them seem less likely to default if the worst were to occur.  

Mortgage pre-approval online

Almost every mortgage provider in Australia, including traditional banks and online-only lenders, should be able to offer home loan pre-approval online.

Pre-approval allows you to determine your maximum budget before finding a property, giving you confidence when negotiating with real estate agents or participating in auctions. You provide the lender with information about your income, expenses, assets and expenses. They analyse this to work out how much you may be able to afford in monthly repayments, and in turn, the loan amount the lender may be willing to lend you.

Are online mortgage lenders safe?

The big banks in Australia are seen as ‘safe as houses’, so it’s fair to ask if your mortgage is just as safe with a smaller, online lender. However, checking the lender's credentials, such as having an Australian Credit License (ACL), can provide reassurance that they follow proper regulations and lend money responsibly.

It’s worth noting that several online mortgage lenders are actually backed by bigger banks, offering not only their finances but their legal protections as well. Doing a little digging into who owns an online lender and where it sources its funding from may be able to help build your confidence in its performance. 

Further, if the bank backing an online lender is an authorised deposit-taking institution (ADI) then money deposited with the bank is protected by the government up to the value of $250,000 thanks to the Financial Claims Scheme

When it comes to privacy and security, every online lender should have thorough encoding and security settings in place to protect your data and your money from malicious individuals. Online security features such as two-factor authentication may help you keep your personal information safe at every step of the home loan process.

How to apply for a home loan

  1. Check your finances: Compare your income and expenses to the cost of home loan repayments, as well as the deposit, stamp duty, and any other fees and charges that may apply, such as an annual package fee for a bundled home loan deal.
  2. Collect financial documents: Payslips, bank statements, bills etc. can be used to confirm your income and expenses.
  3. Fill out a lender’s home loan application form: This could be a paper form or online.
  4. Get pre-approval: This is where a lender agrees in principle to provide a loan, but you or the lender can still walk away.
  5. Make an offer on a property: Whether you’re buying at auction or by private treaty, make sure the price is within your budget.
  6. Credit check and valuation: The lender will check your credit score (based on your history of managing money) and calculate the value of the property to make sure you haven’t over-borrowed.
  7. Application approval: Assuming you’re successful, sign the formal home loan offer and contract.
  8. Prepare for settlement: This is the legal transfer of the property from one owner to another. A solicitor or conveyancer can help confirm that everything is done correctly.
  9. That’s it! Time to move in or start looking for tenants.

Mortgages from Australia's biggest banks & lenders

HSBC
Westpac
NAB
ANZ
Macquarie Bank
Commonwealth Bank
Athena
Yard
Australian Unity
Unloan
Bendigo Bank
Up
AMP Bank
Suncorp Bank
loans.com.au
ING
Well Money
Heritage Bank
Homeloans.com.au
Homestar Finance
Sucasa
Newcastle Permanent
Tiimely Home
Greater Bank

Fact Checked

The information on this page was fact checked by Matthew Tinson, a broker in Queensland specialising in home loans, car financing, personal loans, debt consolidation, and asset financing. For more information on how brokers like this can assist you, look for a broker near you

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, target market determination fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.