RateCity.com.au
powering smart financial decisions

Search for a low rate home loan online

Search for a low rate home loan online

If you’re in the market for low rate home loans then you’ve come to the right place, because at RateCity you can compare thousands of mortgage products online to help you select an option that suits your needs. So put your feet up, pull out your laptop and start comparing.

Whether you’re interested in applying for a fixed rate or variable rate home loan, it pays to shop around and look at products offered by more than the major four banks because the smaller institutions often offer low rate home loans. By switching from the benchmark standard variable home loan rate – the average of the big four’s standard variable rates – to low rate home loans the savings can be significant.

For instance, if the benchmark standard variable rate is say, 7.4 percent and you switch to another lender with low rate home loans at 6.4 percent you’d instantly shave 100 basis points off your rate. For a $300,000 home loan repaid over 25 years, for example, this represents a saving of about $191 per month and more than $57,000 over the life of the loan. Clearly, it can pay to opt for low rate home loans, where possible.

What else you should consider

However, a low rate home loan should not be the only factor considered when shopping for a home loan to suit your circumstances. Other factors to take into account include fees, charges and other features. By looking at a home loan comparison rate, rather than the headline rate, you should be able to get a better idea of a home loan’s overall cost. That’s because the comparison rate takes into account most fees, unlike the headline rate.

When you look at low rate home loans, borrowers would also be wise to consider a product’s features. Does the home loan allow for a split loan option, additional repayments and lump sum payments, for example? Does the loan offer mortgage portability – which means you can transport the mortgage from one property to another if you move house, for instance. Offset accounts can be a helpful loan feature too.

Choosing a home loan is a big financial decision that will be prominent in your life for usually over 25 years, so it’s important to compare and be aware of all your options. Another good tip can be to ask your institution for a home loans fact sheet, so you can judge all home loans on the same criteria. And finally, why not try our home loan repayment calculator to help you get a better idea of the costs of borrowing.

And then you can ask yourself: how do you rate your lender now?

Did you find this helpful? Why not share this article?

Advertisement

RateCity
ratecity-newsletter

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Advertisement

Learn more about home loans

What is the Home Loan Rate Promise?

The Home Loan Rate Promise is RateCity putting its money where its mouth is. We believe that too many Australians are paying too much for their home loans. We’re so confident we can help Aussies save money, if we can’t beat your current rate, we’ll give you a $100 gift card.*

There are two reasons it pays to check your rate with the Home Loan Rate Promise:

  • You can find out how much you could save on your home loan by switching to a loan with a lower interest rate
  • If we can’t beat your current rate, you can claim a $100 gift card with our Home Loan Rate Promise*

Does the Home Loan Rate Promise apply to discounted interest rate offers, such as honeymoon rates?

No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Home Loan Rate Promise.

However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

What is a comparison rate?

The comparison rate is a more inclusive way of comparing home loans that factors in not only on the interest rate but also the majority of upfront and ongoing charges that add to the total cost of a home loan.

The rate is calculated using an industry-wide formula based on a $150,000 loan over a 25-year period and includes things like revert rates after an introductory or fixed rate period, application fees and monthly account keeping fees.

In Australia, all lenders are required by law to publish the comparison rate alongside their advertised rate so people can compare products easily.