RateCity.com.au
powering smart financial decisions

Pros and cons

  • Lots of repayment flexibility
  • Specialised and construction loans available
  • Suits customers with small deposits
  • Some home loans charge ongoing fees
  • Branch access limited to Victoria

Owner occupied products interest rates

TMD

Loan typePrincipal & Interest rateInterest Only
Basic Home Loan (Min Deposit 40%)
2.24% p.a.
2.26% p.a. Comparison rate
3.09% p.a.
3.11% p.a. Comparison rate
Basic Home Loan (Min Deposit 20%)
2.29% p.a.
2.31% p.a. Comparison rate
3.14% p.a.
3.16% p.a. Comparison rate
3 Year Advantage Package (Min Deposit 40%)
1.98% p.a.
3.27% p.a. Comparison rate
3.59% p.a.
4.11% p.a. Comparison rate
2 Year Advantage Package (Min Deposit 40%)
1.79% p.a.
3.33% p.a. Comparison rate
3.59% p.a.
4.12% p.a. Comparison rate
1 Year Advantage Package (Min Deposit 40%)
1.99% p.a.
3.46% p.a. Comparison rate
3.59% p.a.
4.13% p.a. Comparison rate
Advantage Package (Min Deposit 40%)
3.14% p.a.
3.57% p.a. Comparison rate
3.73% p.a.
4.14% p.a. Comparison rate
3 Year Advantage Package (Min Deposit 20%)
2.03% p.a.
3.32% p.a. Comparison rate
3.64% p.a.
4.16% p.a. Comparison rate
2 Year Advantage Package (Min Deposit 20%)
1.84% p.a.
3.38% p.a. Comparison rate
3.64% p.a.
4.17% p.a. Comparison rate
1 Year Advantage Package (Min Deposit 20%)
2.04% p.a.
3.51% p.a. Comparison rate
3.64% p.a.
4.18% p.a. Comparison rate
Advantage Package (Min Deposit 20%)
3.19% p.a.
3.62% p.a. Comparison rate
3.78% p.a.
4.19% p.a. Comparison rate
Advantage Package (Min Deposit 10%)
n/a
3.83% p.a.
4.24% p.a. Comparison rate
4 Year Advantage Package (Min Deposit 40%)
2.49% p.a.
3.35% p.a. Comparison rate
4.04% p.a.
4.25% p.a. Comparison rate
5 Year Advantage Package (Min Deposit 40%)
2.79% p.a.
3.42% p.a. Comparison rate
4.04% p.a.
4.27% p.a. Comparison rate
4 Year Advantage Package (Min Deposit 20%)
2.54% p.a.
3.4% p.a. Comparison rate
4.09% p.a.
4.3% p.a. Comparison rate
5 Year Advantage Package (Min Deposit 20%)
2.84% p.a.
3.47% p.a. Comparison rate
4.09% p.a.
4.32% p.a. Comparison rate
3 Year Fixed Rate Home Loan (Min Deposit 40%)
2.13% p.a.
4.01% p.a. Comparison rate
3.74% p.a.
4.85% p.a. Comparison rate
5 Year Fixed Rate Home Loan (Min Deposit 40%)
2.94% p.a.
4% p.a. Comparison rate
4.19% p.a.
4.85% p.a. Comparison rate
3 Year Fixed Rate Home Loan (Min Deposit 20%)
2.18% p.a.
4.06% p.a. Comparison rate
3.79% p.a.
4.9% p.a. Comparison rate
4 Year Fixed Rate Home Loan (Min Deposit 40%)
2.64% p.a.
4.01% p.a. Comparison rate
4.19% p.a.
4.91% p.a. Comparison rate
3 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
3.84% p.a.
4.95% p.a. Comparison rate
5 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
4.29% p.a.
4.95% p.a. Comparison rate
2 Year Fixed Rate Home Loan (Min Deposit 40%)
1.94% p.a.
4.16% p.a. Comparison rate
3.74% p.a.
4.96% p.a. Comparison rate
4 Year Fixed Rate Home Loan (Min Deposit 20%)
2.69% p.a.
4.06% p.a. Comparison rate
4.24% p.a.
4.96% p.a. Comparison rate
2 Year Fixed Rate Home Loan (Min Deposit 20%)
1.99% p.a.
4.21% p.a. Comparison rate
3.79% p.a.
5.01% p.a. Comparison rate
4 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
4.29% p.a.
5.01% p.a. Comparison rate
2 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
3.84% p.a.
5.06% p.a. Comparison rate
1 Year Fixed Rate Home Loan (Min Deposit 40%)
2.14% p.a.
4.4% p.a. Comparison rate
3.74% p.a.
5.07% p.a. Comparison rate
1 Year Fixed Rate Home Loan (Min Deposit 20%)
2.19% p.a.
4.44% p.a. Comparison rate
3.79% p.a.
5.12% p.a. Comparison rate
1 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
3.84% p.a.
5.17% p.a. Comparison rate
Standard Variable Rate Home Loan (Min Deposit 40%)
4.44% p.a.
4.61% p.a. Comparison rate
5.03% p.a.
5.2% p.a. Comparison rate
Standard Variable Rate Home Loan (Min Deposit 20%)
4.49% p.a.
4.66% p.a. Comparison rate
5.08% p.a.
5.25% p.a. Comparison rate
Standard Variable Rate Home Loan (Min Deposit 5%)
4.54% p.a.
4.71% p.a. Comparison rate
5.13% p.a.
5.3% p.a. Comparison rate
Basic Home Loan (Min Deposit 5%)
2.34% p.a.
2.36% p.a. Comparison rate
n/a
3 Year Advantage Package (Min Deposit 5%)
2.08% p.a.
3.37% p.a. Comparison rate
n/a
2 Year Advantage Package (Min Deposit 5%)
1.89% p.a.
3.43% p.a. Comparison rate
n/a
4 Year Advantage Package (Min Deposit 5%)
2.59% p.a.
3.45% p.a. Comparison rate
n/a
5 Year Advantage Package (Min Deposit 5%)
2.89% p.a.
3.52% p.a. Comparison rate
n/a
1 Year Advantage Package (Min Deposit 5%)
2.09% p.a.
3.56% p.a. Comparison rate
n/a
Advantage Package (Min Deposit 5%)
3.24% p.a.
3.67% p.a. Comparison rate
n/a
5 Year Fixed Rate Home Loan (Min Deposit 20%)
2.99% p.a.
4.05% p.a. Comparison rate
n/a
5 Year Fixed Rate Home Loan (Min Deposit 5%)
3.04% p.a.
4.1% p.a. Comparison rate
n/a
3 Year Fixed Rate Home Loan (Min Deposit 5%)
2.23% p.a.
4.11% p.a. Comparison rate
n/a
4 Year Fixed Rate Home Loan (Min Deposit 5%)
2.74% p.a.
4.11% p.a. Comparison rate
n/a
2 Year Fixed Rate Home Loan (Min Deposit 5%)
2.04% p.a.
4.26% p.a. Comparison rate
n/a
1 Year Fixed Rate Home Loan (Min Deposit 5%)
2.24% p.a.
4.49% p.a. Comparison rate
n/a

Investment purpose products interest rates

TMD

Loan typePrincipal & Interest rateInterest Only
Basic Home Loan (Min Deposit 40%)
2.54% p.a.
2.56% p.a. Comparison rate
2.74% p.a.
2.76% p.a. Comparison rate
Basic Home Loan (Min Deposit 20%)
2.59% p.a.
2.61% p.a. Comparison rate
2.79% p.a.
2.81% p.a. Comparison rate
3 Year Advantage Package (Min Deposit 40%)
2.39% p.a.
3.79% p.a. Comparison rate
2.59% p.a.
4.05% p.a. Comparison rate
5 Year Advantage Package (Min Deposit 40%)
2.99% p.a.
3.84% p.a. Comparison rate
3.19% p.a.
4.08% p.a. Comparison rate
3 Year Advantage Package (Min Deposit 20%)
2.44% p.a.
3.84% p.a. Comparison rate
2.64% p.a.
4.09% p.a. Comparison rate
2 Year Advantage Package (Min Deposit 40%)
2.19% p.a.
3.86% p.a. Comparison rate
2.39% p.a.
4.12% p.a. Comparison rate
5 Year Advantage Package (Min Deposit 20%)
3.04% p.a.
3.89% p.a. Comparison rate
3.24% p.a.
4.13% p.a. Comparison rate
3 Year Advantage Package (Min Deposit 10%)
n/a
2.69% p.a.
4.6% p.a. Comparison rate
4 Year Advantage Package (Min Deposit 40%)
2.99% p.a.
3.89% p.a. Comparison rate
3.19% p.a.
4.14% p.a. Comparison rate
2 Year Advantage Package (Min Deposit 20%)
2.24% p.a.
3.91% p.a. Comparison rate
2.44% p.a.
4.17% p.a. Comparison rate
5 Year Advantage Package (Min Deposit 10%)
n/a
3.29% p.a.
4.56% p.a. Comparison rate
4 Year Advantage Package (Min Deposit 20%)
3.04% p.a.
3.94% p.a. Comparison rate
3.24% p.a.
4.19% p.a. Comparison rate
2 Year Advantage Package (Min Deposit 10%)
n/a
2.49% p.a.
4.72% p.a. Comparison rate
4 Year Advantage Package (Min Deposit 10%)
n/a
3.29% p.a.
4.65% p.a. Comparison rate
1 Year Advantage Package (Min Deposit 40%)
2.49% p.a.
4.01% p.a. Comparison rate
2.69% p.a.
4.29% p.a. Comparison rate
1 Year Advantage Package (Min Deposit 20%)
2.54% p.a.
4.06% p.a. Comparison rate
2.74% p.a.
4.34% p.a. Comparison rate
1 Year Advantage Package (Min Deposit 10%)
n/a
2.79% p.a.
4.94% p.a. Comparison rate
Advantage Package (Min Deposit 40%)
3.72% p.a.
4.13% p.a. Comparison rate
4.01% p.a.
4.42% p.a. Comparison rate
Advantage Package (Min Deposit 20%)
3.77% p.a.
4.18% p.a. Comparison rate
4.06% p.a.
4.47% p.a. Comparison rate
Advantage Package (Min Deposit 10%)
n/a
4.68% p.a.
5.08% p.a. Comparison rate
5 Year Fixed Rate Home Loan (Min Deposit 40%)
3.14% p.a.
4.42% p.a. Comparison rate
3.34% p.a.
4.66% p.a. Comparison rate
5 Year Fixed Rate Home Loan (Min Deposit 20%)
3.19% p.a.
4.47% p.a. Comparison rate
3.39% p.a.
4.71% p.a. Comparison rate
5 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
3.44% p.a.
4.76% p.a. Comparison rate
3 Year Fixed Rate Home Loan (Min Deposit 40%)
2.54% p.a.
4.53% p.a. Comparison rate
2.74% p.a.
4.79% p.a. Comparison rate
4 Year Fixed Rate Home Loan (Min Deposit 40%)
3.14% p.a.
4.55% p.a. Comparison rate
3.34% p.a.
4.8% p.a. Comparison rate
3 Year Fixed Rate Home Loan (Min Deposit 20%)
2.59% p.a.
4.58% p.a. Comparison rate
2.79% p.a.
4.84% p.a. Comparison rate
4 Year Fixed Rate Home Loan (Min Deposit 20%)
3.19% p.a.
4.6% p.a. Comparison rate
3.39% p.a.
4.85% p.a. Comparison rate
3 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
2.84% p.a.
4.89% p.a. Comparison rate
4 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
3.44% p.a.
4.9% p.a. Comparison rate
2 Year Fixed Rate Home Loan (Min Deposit 40%)
2.34% p.a.
4.7% p.a. Comparison rate
2.54% p.a.
4.96% p.a. Comparison rate
2 Year Fixed Rate Home Loan (Min Deposit 20%)
2.39% p.a.
4.74% p.a. Comparison rate
2.59% p.a.
5.01% p.a. Comparison rate
2 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
2.64% p.a.
5.06% p.a. Comparison rate
5 Year Portfolio Loan (Min Deposit 10%)
n/a
3.44% p.a.
5.13% p.a. Comparison rate
1 Year Fixed Rate Home Loan (Min Deposit 40%)
2.64% p.a.
4.96% p.a. Comparison rate
2.84% p.a.
5.24% p.a. Comparison rate
1 Year Fixed Rate Home Loan (Min Deposit 20%)
2.69% p.a.
5.01% p.a. Comparison rate
2.89% p.a.
5.28% p.a. Comparison rate
4 Year Portfolio Loan (Min Deposit 10%)
n/a
3.44% p.a.
5.31% p.a. Comparison rate
1 Year Fixed Rate Home Loan (Min Deposit 10%)
n/a
2.94% p.a.
5.33% p.a. Comparison rate
3 Year Portfolio Loan (Min Deposit 10%)
n/a
2.84% p.a.
5.34% p.a. Comparison rate
Standard Variable Rate Home Loan (Min Deposit 40%)
5.02% p.a.
5.19% p.a. Comparison rate
5.31% p.a.
5.48% p.a. Comparison rate
Standard Variable Rate Home Loan (Min Deposit 20%)
5.07% p.a.
5.24% p.a. Comparison rate
5.36% p.a.
5.53% p.a. Comparison rate
2 Year Portfolio Loan (Min Deposit 10%)
n/a
2.64% p.a.
5.56% p.a. Comparison rate
Standard Variable Rate Home Loan (Min Deposit 10%)
n/a
5.41% p.a.
5.58% p.a. Comparison rate
1 Year Portfolio Loan (Min Deposit 10%)
n/a
2.94% p.a.
5.89% p.a. Comparison rate
Portfolio Loan (Min Deposit 10%)
n/a
5.98% p.a.
6.2% p.a. Comparison rate
Basic Home Loan (Min Deposit 5%)
2.64% p.a.
2.66% p.a. Comparison rate
n/a
3 Year Advantage Package (Min Deposit 5%)
2.49% p.a.
3.89% p.a. Comparison rate
n/a
4 Year Advantage Package (Min Deposit 5%)
3.09% p.a.
3.89% p.a. Comparison rate
n/a
5 Year Advantage Package (Min Deposit 5%)
3.09% p.a.
3.93% p.a. Comparison rate
n/a
2 Year Advantage Package (Min Deposit 5%)
2.29% p.a.
3.96% p.a. Comparison rate
n/a
1 Year Advantage Package (Min Deposit 5%)
2.59% p.a.
4.11% p.a. Comparison rate
n/a
Advantage Package (Min Deposit 5%)
3.82% p.a.
4.23% p.a. Comparison rate
n/a
5 Year Fixed Rate Home Loan (Min Deposit 5%)
3.24% p.a.
4.51% p.a. Comparison rate
n/a
3 Year Fixed Rate Home Loan (Min Deposit 5%)
2.64% p.a.
4.63% p.a. Comparison rate
n/a
4 Year Fixed Rate Home Loan (Min Deposit 5%)
3.24% p.a.
4.64% p.a. Comparison rate
n/a
2 Year Fixed Rate Home Loan (Min Deposit 5%)
2.44% p.a.
4.79% p.a. Comparison rate
n/a
1 Year Fixed Rate Home Loan (Min Deposit 5%)
2.74% p.a.
5.06% p.a. Comparison rate
n/a
Standard Variable Rate Home Loan (Min Deposit 5%)
5.12% p.a.
5.29% p.a. Comparison rate
n/a

Home loan repayment calculator

Thinking about taking out a home loan with Bank of Melbourne? Use our home loan calculator to see how much you’d have to repay under different borrowing scenarios. You can also see how Bank of Melbourne home loans compare with other options.

I am an

With a repayment type

Borrow amount

$

Deposit amount %

Loan term

Your estimated mortgage repayments

at interest rate 1.79%

Total interest payable

$0

Total loan repayments

$0

Contact a mortgage broker

Bank of Melbourne homeloans are vailable through brokers who can help find the right loan and manage your application at no charge.

Bank of Melbourne customer service

Home loan customers at Bank of Melbourne can contact the bank by phone, choose to live chat with Bank of Melbourne employees online, contact them via email, visit in person at their Victorian branches or book an appointment through the website. 

  • Customer service centre (phone, email, branch)
  • Mobile app
  • Online banking
  • Live Chat
  • Mobile banking staff

How to apply for a Bank of Melbourne home loan

Bank of Melbourne allows customers to apply for a home loan in a variety of ways. Customers can also make online or email enquries before applying for a loan online, by phone, or in-person at Bank of Melbourne branches. 

Before applying for a home loan it is advisable to think about how much money you can afford to borrow given your financial situation and income. 

Some of the documentation you’ll need to provide applying for a home loan may include:

  • Personal identification
  • Proof of employment and earnings
  • Details of your savings history and accounts
  • Information on other loans, debts and expenses

Refinancers will also need to provide statements on their current loan for the last six months. To apply for a construction loan, you may need to provide council approved plans, building quotes and proof of sale.

About Bank of Melbourne home loans

Bank of Melbourne offers a range of home loans to suit a variety of customers and circumstances, including:

  • First home buyers
  • Upgraders
  • Refinancers
  • Investors
  • Self-employed (low-doc loans)
  • Super fund home loans

Mortgage borrowers in Australia who choose a Bank of Melbourne home loan can choose from a variety of interest rate options, such as:

  • Principal and interest home loans
  • Interest-only home loans
  • Variable interest rates
  • Fixed interest rates (for terms of one to five years)

Bank of Melbourne also offers interest rate discounts and temporary introductory interest rate offers.

Customers are able to begin a Bank of Melbourne home loan application online and receive indicative approval in less than 15 minutes. A home loan expert will then call to discuss your mortgage options.

Bank of Melbourne home loan rates

Although Bank of Melbourne is not one of Australia’s big four banks, it is part of Westpac Group, making its rates comparable with larger banks. However, permanent discounts and introductory offers may help lower their rates.

Bank of Melbourne home loan interest rates vary from product to product. As a general rule, owner-occupiers are granted lower interest rates than investors, and principal and interest borrowers get lower interest rates than interest-only borrowers.

Bank of Melbourne home loans review

Although Bank of Melbourne is owned by Westpac Group, it is still considered a regional bank, rather than a national bank. Some Victorians may choose one of Bank of Melbourne’s home loans over a mortgage from one of the big four banks because of BoM’s local appeal. Bank of Melbourne’s contact centre is in Victoria, and the bank’s marketing speaks to its commitment to the local economy. While Bank of Melbourne does not operate branches outside of Victoria, customers can also access services through BankSA and St.George branches.

Bank of Melbourne offers a wide range of home loan products, but its selection may not be as extensive those of larger banks in Australia. Bank of Melbourne home loans include options for first time buyers, investors and self-employed borrowers.

Bank of Melbourne home loans can be principal and interest or interest only, and borrowers can choose between fixed-rate and variable-rate home loans.

Learn more about home loans

How to apply for a pre-approval home loan from Bendigo Bank?

Applying for pre-approval on your home loan gives you confidence in your ability to secure finance while looking at potential new homes. You can get a free and personalised pre-approval home loan from Bendigo Bank in just a few minutes, without any credit checks or paperwork. 

Bendigo Bank offers pre-approval for home loans that allow you to understand the home loan size you may be able to get before looking for a new home. 

With the pre-approval, Bendigo Bank provides an estimate of your borrowing power. This figure incorporates stamp duty, lenders mortgage insurance (LMI) and any first home buyer incentives you may be eligible for. You may also qualify for the First Home Loan Deposit Scheme initiative, depending on your circumstances. 

To apply for a pre-approval on your home loan from Bendigo Bank, all you need to do is fill in a smart form. You could also contact the bank directly on 1300 236 344.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

How do I apply for a home loan pre-approval from Commonwealth Bank?

To apply for a Commbank home loan pre-approval, you can either call the bank at 13 2224 or meet one of the bank’s lending specialists. You can set up a meeting online if you wish. You’ll need to do some homework before contacting the bank, such as gathering information on the kind of properties you’d like to buy and their prices.

Preparing a financial summary, which lists all your income sources as well as significant expenses, can also help determine how much you can afford to borrow. You may also want to check your credit score before applying for pre-approval.

It’s worth remembering that a CBA home loan pre-approval doesn’t guarantee that you’ll get the loan. Once you get the pre-approval, you’ll have about three to six months to decide on a property and apply for the home loan. The bank will then confirm that the property is suitable for the loan before fully approving it.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

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 is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

How do you find cheap home loans?

With so many interest rate options and repayment types available, finding the cheapest home loan may depend on the type of loan you choose.

Whether you’re looking for an owner-occupier or investor loan, with interest-only or principal and interest repayments, on a fixed or variable interest rate, the cheapest home loan rate available may vary greatly.

One way to find the cheapest option for you is to narrow down your search and compare the options that best suit your individual requirements. RateCity’s home loan comparison tables can help you get started on your search and take the hassle out of shopping around.

What are the different types of home loan interest rates?

A home loan interest rate is used to calculate how much you’ll pay the lender, usually annually, above the amount you borrow. It’s what the lenders charge you for them lending you money and will impact the total amount you’ll pay over the life of your home loan. 

Having understood what are home loan rates in general, here are the two types you usually have with a home loan:

Fixed rates

These interest rates remain constant for a specific period and are a good option if you’re a first-time buyer or if you’re looking for a fixed monthly repayment. One possible downside of a fixed rate is that it may be higher than a variable rate. Also, you don’t benefit from any lowering of interest rates in the market. On the flip side, if rates go up, your rate won’t change, possibly saving you money.

Variable rates

With variable interest rates, the lender can change them at any time. This change can be based on economic conditions or other reasons. Changes in interest rates could be beneficial if your monthly repayment decreases but can be a problem if it increases. Variable interest rates offer several other benefits often not available with fixed rate home loans like redraw and offset facilities and free extra repayments. 

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.

How do I apply for a home improvement loan?

When you want to renovate your home, you may need to take out a loan to cover the costs. You could apply for a home improvement loan, which is a personal loan that you use to cover the costs of your home renovations. There is no difference between applying for this type of home improvement loan and applying for a standard personal loan. It would be best to check and compare the features, fees and details of the loan before applying. 

Besides taking out a home improvement loan, you could also:

  1. Use the equity in your house: Equity is the difference between your property’s value and the amount you still owe on your home loan. You may be able to access this equity by refinancing your home loan and then using it to finance your home improvement.  Speak with your lender or a mortgage broker about accessing your equity.
  2. Utilise the redraw facility of your home loan: Check whether the existing home loan has a redraw facility. A redraw facility allows you to access additional funds you’ve repaid into your home loan. Some lenders offer this on variable rate home loans but not on fixed. If this option is available to you, contact your lender to discuss how to access it.
  3. Apply for a construction loan: A construction loan is typically used when constructing a new property but can also be used as a home renovation loan. You may find that a construction loan is a suitable option as it enables you to draw funds as your renovation project progresses. You can compare construction home loans online or speak to a mortgage broker about taking out such a loan.
  4. Look into government grants: Check whether there are any government grants offered when you need the funds and whether you qualify. Initiatives like the HomeBuilder Grant were offered by the Federal Government for a limited period until April 2021. They could help fund your renovations either in full or just partially.  

Are fixed rates or variable rates cheaper?

Fixed and variable home loan interest rates are discretionary based on the lender’s decision. They will also be influenced by the Australian economy, as well as the Reserve Bank of Australia’s cash rate. The specific interest rate you may be offered will also depend on your credit history and financial situation.

Whether a fixed or variable rate home loan is the cheaper option for you will depend on all the above, and may still fluctuate over a 25-year home loan term. Therefore, it’s worth comparing your loan options with our comparison tables to see how the rates compare, based on your specific financial needs.

Who offers 40 year mortgages?

Home loans spanning 40 years are offered by select lenders, though the loan period is much longer than a standard 30-year home loan. You're more likely to find a maximum of 35 years, such as is the case with Teacher’s Mutual Bank

Currently, 40 year home loan lenders in Australia include AlphaBeta Money, BCU, G&C Mutual Bank, Pepper, and Sydney Mutual Bank.

Even though these lengthier loans 35 to 40 year loans do exist on the market, they are not overwhelmingly popular, as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

Can first home buyers apply for an ING home loan?

First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan. 

First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates. 

First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.

How do I apply for Westpac’s first home buyer loan?

If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan. 

You can use Westpac’s online mortgage calculators to estimate your borrowing power. You can also work out the time it might take to save up for the deposit, and the size of your home loan repayments

When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for.