Why should you look for the best home loan rates?

While there is no one-size-fits-all top home loan, working out which home loans most closely match your needs can help you to find the best mortgage for you.

With the variety of Australian home loan offers available, there will likely be several mortgages that could be right for you. Once you know what to compare and what you're looking for, you should be able to identify some good options, leading you to your best mortgage.

RateCity's comparison tool allows you to filter home loans by many different features, giving you a better idea of which mortgages could offer the best home loan rates, features and benefits to suit your needs.

Find and compare Australia's top home loans

Sort By
Product
Advertised Rate
Comparison Rate*
Company
Monthly Repayment
Features
Real Time Rating™
Go to site

2.19%

Fixed - 3 years

2.45%

Macquarie Bank

$1,299

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

3.57

/ 5
More details

2.74%

Fixed - 5 years

2.62%

Macquarie Bank

$1,382

Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied

2.63

/ 5
More details

2.09%

Fixed - 2 years

2.35%

Tic Toc

$1,285

Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied

3.48

/ 5
More details

2.68%

Variable

2.69%

Suncorp Bank

$1,373

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

3.56

/ 5
More details

2.29%

Variable

2.33%

Mortgage House

$1,314

Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied

3.47

/ 5
More details

2.68%

Variable

2.69%

Greater Bank

$1,373

Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied

3.19

/ 5
More details

Learn more about home loans

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

Want to know how to get a home mortgage? There are several questions to consider when weighing up home loan options to find the right one for you:

  • How long will I need to take out a home loan for?
  • What are the best home loan rates? Are they fixed or variable rates?
  • What will my mortgage repayments be? Can I make additional repayments?
  • Are there any added fees to include in my calculations?
  • Can I sustain a good lifestyle while paying off this mortgage?

Remember that while advice on the best home loans from friends and family might be useful, it shouldn't alone be the sole basis of your home loan decision. Everyone is different, which is why making your mortgage comparison to find the best home loan rates for your finances is so important.

Top mortgage factors to consider

When looking for the most suitable mortgage for your needs, here are a few of the factors to keep in mind:

Fixed or variable interest rate?

Before you start looking for the best mortgage interest rates, decide whether you're interested in a variable or fixed interest rate. Keep in mind that the best home loan rates for your finances may not necessarily be the lowest rates available.

Variable rate home loans

Most mortgages are based on a variable interest rate that will fluctuate over time, often in line with the Reserve Bank of Australia cash rate. If rates rise, so will your mortgage repayments, but if your bank passes on a rate cut, you could find yourself paying less interest on your home loan.

Fixed rate home loans

Some mortgages allow you to lock in a low fixed interest rate for a period of time, keeping your budgeting consistent to help you plan your future repayments. While this could see you miss out on some savings if mortgage rates were to fall, you'd also be protected from higher repayments if home loan rates were to rise.

What is the average interest rate for a home loan?

When you're comparing home loan interest rates, finding a baseline average can help you better understand which home loans charge low or high interest.

Because mortgage rates change regularly, vary widely based on loan type, and aren't always available to all types of borrowers (e.g. low owner-occupier home loan rates aren't available to investors), the average of all home loan interest rates in the market rarely stays the same for very long.

The Reserve Bank of Australia (RBA) keeps track of average home loan interest rates in Australia. This can help you get a better idea of what to expect when you’re comparing different home loan offers.

Remember that there’s more to a home loan than just its interest rate. Even if a home loan has a higher than average interest rate, if it also offers features and benefits that suit your needs, it may still be a better choice than some home loans with cheaper interest rates. Compare different home loan options to learn more before you apply.

Finding the lowest interest rates

Once you've decided on which type of loan you would like, it's time to start comparing home loan interest rates to find the lowest mortgage rates in Australia. It's important to keep in mind that the lowest current mortgage rates aren't necessarily the best mortgage rates for all borrowers, as they may require borrowers to fulfil specific terms and conditions.

How large is your home loan deposit?

Many of the lowest rates on the market are available only to borrowers who can afford a large deposit, often 20% or more of the property value. This is because the higher the deposit a borrower can afford, the less of a risk they represent to a lender.

Some home loans are available with smaller minimum deposits, such as 10% or even 5% of the property value, though these loans will likely require you to pay a higher interest rate, and as well as Lender's Mortgage Insurance (LMI).

Are you an owner-occupier or an investor?

The interest rate on your home loan may also partially depend on whether you're planning to live in the property you buy as an owner-occupier, or rent it out as an investor.

Due to the higher average risk of payment defaults, as well as government regulations, lenders generally charge higher interest rates for investor home loans than they do for owner occupier home loans.

Customising your home loan search using RateCity's comparison tools can help you to compare mortgages that more closely match your circumstances, and determine which are the best home loan rates for your unique household.

Looking at home loan fees

Another consideration when looking for the best home loans in Australia is finding out what fees will be charged.

There are many different types of fees to be aware of when looking for the cheapest home loan for your needs. 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, this doesn't cover the whole range of home loan fees out there that can be charged by different lenders, so when looking for the best mortgage for your needs, it's essential to thoroughly research potential loan options and enquire about what fees will be charged.

It is possible to find cheap home loans that charge relatively little to no fees, so don't feel obliged to pay thousands in unnecessary costs.

You can also often negotiate with a lender when refinancing or taking out a new loan to waive some of the upfront costs - if a lender wants your business, they may be willing to offer a discount to keep you happy.

For this reason, the best home loan rates for your needs may not necessarily be exactly what's advertised online, but may be arranged by contacting a lender and/or a mortgage broker.

Are the best home loans from banks or non-bank mortgage lenders?

One of the simplest ways to apply for a home loan is to visit your current bank, and find out what they can offer their customers. Some advantage of getting a home loan from your bank is that they already know your details, which can help simplify the application process, and you should already have a good idea of what level of customer service they provide.  

However, your bank may not be the best bank for you to get a home loan from. They may charge higher interest rates or fees than you could comfortably afford, or may not offer the mortgage features that you’re interested in. Some of the best bank home loans may come from other banks, who offer more competitive home loan interest rates, lower fees, or features and benefits that better suit your financial situation. 

It’s often a good idea to compare home loan options from a variety of different banks and non-bank lenders before you apply for a mortgage. Non-bank mortgage lenders can include credit unions, building societies and mutual banks. Some of these lenders offer low interest rates and low fees on their home loans in order to complete with the bigger banks. 

There are also online-only lenders and fintechs, which let you manage you money and your home loan from a smartphone app. Online-only lenders may be able to offer even lower rates and fees, as they don’t have to manage the ongoing expenses a network of offices or bank branches. Of course, this also means you wouldn’t have the option of meeting a banker in person at a branch, so consider whether this is important to you before you apply. 

How do I find the top home loans on RateCity?

Comparing home loans can seem challenging, but there are ways to make it easier. Using a comparison website like RateCity, you can compare a variety of home loan options side by side, and see which home loan interest rates, fees, features and benefits may best suit your needs. 

For a faster and simpler way to compare the top home loan on RateCity, you can start be checking their Real Time Ratings™. These star ratings are based on a combination of a loan’s overall cost (including interest and fees) and the flexibility offered by its features and other benefits. Real Time Ratings™ are updated every day, to reflect changes to interest rates and features from banks and lenders. 

To narrow down your search to just the top home loans in a category, you can check out the RateCity Home Loan Leaderboards. These collect the top-rated home loans on RateCity each day, and are updated when there are changes to the Real Time Ratings™. 

If a mortgage offer stays on the Home Loan Leaderboards for six months or more, to becomes eligible for the coveted RateCity Gold Award. If you see this gold badge on a home loan offer, you can be confident it’s one of the top-rated products in its category on RateCity.