Compare home loan rates from 100+ lenders with our mortgage comparison tool

Compare home loan rates from a wide range of Australian lenders, and find mortgage offers that best suit your needs. Start your home loan comparison at RateCity for a smarter way to compare home loan rates. - Data last updated on 17 Nov 2018

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Why is it important to compare home loans?

There are great reasons to compare home loans, and almost all of them benefit you in a positive way:

  • Are you missing out on home loan features or discounts because you haven't switched lenders in years?
  • Do you want some of the best home loan interest rates on the market? 

With thousands of home loans on the Australian market, it can be difficult to work out which home loan is best for you. With a home loan comparison, you can look at the interest rates, features and benefits of several different home loans side by side and get a better idea of the value they offer before making any decisions. 

Whether you're after better rates or mortgage repayments lower than the Australian average, there are plenty of great reasons to compare home loans with RateCity. 

How to compare home loans

Start your home loan comparison by asking yourself the following questions:

  • How much do you want to borrow? - The more you choose to borrow for your home loan, the higher the cost of repayments.
  • How much deposit can you afford? - Home loans with lower interest rates are more likely to require higher upfront security deposits. If your deposit is less than 20% of the property's value, you may be required to pay Lender’s Mortgage Insurance (LMI).
  • How long do you want your loan term to be? - Many home loans have 30-year terms, though some can last for 25 years or less, or run for as long as 45 years. Generally, the longer your loan term, the less interest you’ll pay each month, but the more interest you’ll pay on the loan in total.
  • Are you buying as an owner-occupier or as an investor? - Investors are often charged higher home loan interest rates than owner-occupiers.
  • What features do you want in a mortgage? - The best home loan is one you're happy with, and that may mean other features, such as allowing you to make extra repayments, supporting an offset account, or a redraw facility. 

Once you've worked out some of your preferences, you can start to narrow down your list of potential home loan options for your mortgage comparison.

Example: Finding a low rate investment loan

Roy is a first-time investor who wants the lowest current home loan interest rate on the market. He has a deposit of $100,000 and wants a loan of $500,000. By selecting a loan term of 30 years using RateCity’s compare home loans function, he discovers more than 1000 potential loans available to him.

Roy previously asked his bank, one of the big four banks, about the cost of a home loan. During his home loan comparison, Roy discovers there are at least five lenders on RateCity that can shave up to $80 a month off what his bank offered, with interest rates below 4.2%. Over 30 years, that adds up to a significant saving of over $28,000.

Roy wants to know more about one of the loans on offer, due to its low rate and low fees. He clicks the ‘View Now’ button and is directed to the lender’s website, where he can find more information about their home loan offers, as well as the lender's contact details.

How to find the lowest rates on RateCity

To see what current home loan interest rates are available in Australia today, and find the lowest interest rates you're likely to be eligible for, start by following these steps:

  • Enter some basic home loan search details at RateCity, such as whether you’re an owner occupier or an investor; how much you plan to borrow compared to the property's total value, or; your preference between fixed and variable interest rates.
  • Use more search filters to further narrow down your list of home loans. The more details you can provide, the more precise your mortgage comparison search results can be.
  • Sort RateCity’s comparison table either by Advertised Rate (for interest rate only) or Comparison Rate (for the approximate cost of interest plus fees) to find the lowest available results for your home loan requirements.

Find the lowest home loan rates on RateCity

What is considered a good interest rate on a home loan?

An interest rate of 4% or lower is generally considered to be a good home loan interest rate when making a mortgage comparison, though it's important to remember that the mortgage with the lowest rate may not be the best home loan for your unique needs.

Some low-interest home loans are quite simple, offering fewer extra features and benefits. The lowest interest rates in Australia may not be available to every borrower, due to the specific financial requirements of different lenders. 

Australia's average home loan interest rate changes regularly, as mortgage offers are added to or removed from the market. Because every mortgage is different, you’ll need to decide what the best home loan is for your needs. 

Working out how much extra you may need to pay in interest for home loans with additional features can help you get a better idea of the value they may be able to offer your household.

What are the best home loan rates, and how do I get them?

A great home loan rate is what you'll be after regardless of whether you're a first-home buyer, purchasing something new, or investing, but the best home loan rates are constantly changing.

Instead of focusing on the best home loan rates, consider looking for the best rates as they apply to your needs. 

Everyone's needs are different, and so the best mortgage rates on RateCity might be great for someone with an excellent credit score, but unattainable for someone with a few marks here and there. This is called "borrowing power", and it can shift loan rates in positive and negative ways. 

To get a gauge on what your borrowing power is like, look into your credit score and find out whether the best rates are possible for you.

Get your credit rating checked

How to customise your home loan comparison results

When you compare home loans, you can enter your preferred mortgage features to help you find an option that better suits your needs.

Firstly, think about if you want a variable rate loan or a fixed rate loan:

You can also choose between making principal and interest repayments or interest-only repayments on your home loan:

  • Principal and interest (P&I) repayments – These home loan payments let you gradually repay the money you've borrowed while also covering your interest charges. While P&I repayments tend to be more expensive from month to month than paying interest only, they let you make steady progress towards clearing your debt, and can help to minimise the total interest you’re charged over the loan term.
  • Interest-only (IO) repayments - Some lenders allow you to delay repaying your debt and simply pay the interest charges for a limited time (generally between one and five years). This can help make your repayments more affordable in the short term, though you may end up paying more total interest over the loan’s full term as your repayments won’t be reducing the principal amount owing.

Learn more about home loans with the RateCity guide

Select your home loan features

After you’ve chosen your preferred type of home loan, interest rate and repayments, you can compare mortgages with some popular home loan features, such as an offset account, a redraw facility, or extra repayments.

  • Offset account - An offset account allows you to reduce the interest you pay by using money in a separate, but linked account to offset what you owe. For example, if you owe $300,000 but have $50,000 in an offset account, you’ll be charged interest as if you only owed $250,000, shrinking your repayments slightly.
  • Extra repayments - Some lenders allow you to make extra mortgage repayments if you have a good month, receive a one-off windfall, or find youself able to afford higher regular repayments. This can help you clear your loan balance more quickly, and reduce the total interest you’re charged on your loan.
  • Redraw facility - A redraw facility lets you withdraw any extra home loan repayments you’ve made if you need that money back in your pocket, which can be useful for covering unexpected expenses without having to take on more debt with a credit card or personal loan.

Choose your fees

One of the benefits when you compare home loans with a financial comparison website like RateCity is that as well as looking at home loan interest rates, you can also compare fees. High fees on a home loan can negate the impact of a low interest rate, so they’re important to consider.

Some of the fees you’re likely to encounter during your mortgage comparison include:

  • Upfront fees – These are the fees the lender will charge when you start your loan. They sometimes include establishment fees, conveyancing fees, stamp duty and Lender’s Mortgage Insurance (LMI). Upfront fees vary significantly between lenders.
  • Ongoing fees – These are the monthly or yearly fees your lender may charge for the upkeep of your loan.
  • Redraw fees – For some loans that feature a redraw facility, making a redraw may require paying a fee.
  • Discharge fees – At the conclusion of your loan, your lender may charge a termination fee to cover the administration costs.

Example: Flexibility seals the deal

Louise already has a home loan, but it doesn’t offer many benefits. She instead wants to refinance onto a loan where she can offset interest and make extra repayments once a year when she gets her tax refund. However, she doesn’t want to pay a high interest rate or high fees for those benefits.

To compare home loans, Louise enters her preferences at RateCity and finds there are a dozen loans with no ongoing fees, but many features. Even better, many of those home loans have interest rates lower than 4%, when at the moment she has a 4.5% interest rate. By switching, she stands to save more than $1600 a year.

Current Home Loan New Home Loan
Interest Rate 4.5% 4.0%
Loan Amount Owing $500,000 $500,000
Remaining Loan Term 25 years 25 years
Monthly Repayment $2779 $2639
Total Interest Paid $333,749 $297,755
Total Loan Cost $833,749 $791,755
Above examples are hypothetical and for illustrative purposes only. Calculation source: MoneySmart

Other types of loans to compare

RateCity also allows you to compare less common types of home loans, such as low doc loans.

A low documentation loan is for borrowers who do not have the documents that are typically required to apply for a mortgage, such as:

  • Regular payslips
  • Steady employment history
  • Clean credit history

As a result, lenders often treat these customers as higher default risks, and decline their applications for standard home loans.

If you are in this position, it may be helpful to compare the low doc options on the market, as the current home loan interest rates on offer can vary significantly.

Find low documentation home loans in Australia

Call RateCity 1300 001 153

^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, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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