Compare top home loan rates^ in Australia

Find home loans that best suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more. - Data last updated on 19 Mar 2019

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repayment $1264 monthly

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repayment $1249 monthly

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repayment $1277 monthly

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repayment $1318 monthly

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repayment $1318 monthly

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repayment $1304 monthly

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repayment $850 monthly

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repayment $1318 monthly

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repayment $1284 monthly

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repayment $1289 monthly

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Why you need to compare home loans

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Whether you’re a first home buyer or a long-time property investor, one of the first steps you should take before taking out a mortgage is to compare home loans from a range of Australian lenders. 

Buying a home is arguably the most expensive purchase you’ll ever make, so it pays to do your research. This is first and foremost to ensure you choose the most competitive home loan for your financial needs, and don’t end up paying more than you have to

When it comes to home loan comparison, a lot of people fall into the trap of just looking at the interest rate. 

However, there are several components of a home loan that can influence how much you’ll pay, including:

  • The loan amount
  • The interest rate
  • The loan type (fixed rate, variable rate or split rate loan)
  • What type of borrower you are (owner-occupier or investor)
  • The features (redraw facility, extra repayments, offset accounts etc.)
  • The fees (upfront fees, ongoing fees etc. 

You shouldn’t need a law degree to understand the fine print of a home loan and make your choice. This is where home loan comparison rates come in. 

What is a comparison rate?

A comparison rate is a combination of the loan’s interest rate with its fees and other charges, such as ongoing monthly or yearly fees and upfront fees. 

The comparison rate will combine these fees with the interest rate and then create an average rate for the loan, based on a pre-set loan amount and loan term. 

How to compare home loans 

  1. Comparison tables & tools

One of the best ways to compare home loans in Australia is by utilising home loan comparison tools. These include interest rate comparison tables, mortgage repayment calculators, Lenders Mortgage Insurance (LMI) calculators and stamp duty calculators. 

RateCity.com.au allows you to easily compare home loans through its easy to navigate comparison tables. Search for and compare home loan interest rates from over 100 Australian lenders, and use the filtering system to narrow down your options to find a loan that suits your specific financial needs. 

You can then click on one or more loans and select ‘Compare’ to see how the loan stacks up against the big four banks and/or any other loans you may be interested in. 

  1. Comparison rates

When it comes to mortgage comparison, you shouldn’t only look at the advertised interest rate. Once you’ve narrowed down a selection of home loans thanks to the comparison tools, you can use the comparison rate as a starting-off guide to calculate your potential mortgage repayments with RateCity.com.au’s mortgage repayment calculator, and measure this against your budget. 

This is one of the more effective ways to compare home loan interest rates as comparison rates give you a more realistic interest rate for what your total costs will be, and allows you to budget your expenses and repayments much more effectively. 

For example

Nick wants to borrow $350,000 for a 30-year home loan and he can afford up to $1,600 a month on mortgage repayments. By using the RateCity.com.au comparison tools, he found a home loan with an interest rate of 3.50 per cent. He then used a mortgage repayment calculator and found his monthly repayments will be $1,572.  

As a rule of thumb, you should avoid paying more than 30 per cent of your income on your mortgage, or risk entering into mortgage stress. 

  1. Look at the features and flexibility

The lowest interest rate isn’t necessarily the most important thing to consider when comparing home loans. If you’re desperate for a home loan with features such as an offset account, there’s no point just looking at the comparison rate. You need to choose a loan that actually suits your financial needs and offers those features. 

RateCity.com.au’s comparison tables allow you to easily view a home loan product’s features, so you can compare what is on offer and level of flexibility in the home loan. 

Home Loans 101 

 What are the best home loan comparison rates in Australia? 

There are a range of factors that you need to consider when comparing home loans, and the best home loan for one person may not necessarily be the best for another. 

While there is no one ‘best’ home loan on the market, you can utilise home loan comparison tools, mortgage repayment calculators, as well as home loan guides to make the most educated decision around what is the best home loan for you. 

It is important that you don’t just look at the comparison rate when choosing your home loan. These are the questions you should ask yourself when comparing your home loan options to find the most competitive mortgage for you: 

  • What is the length of the loan?
  • What will my repayments be?
  • Is the rate fixed, variable or split?
  • Can I make additional repayments?
  • What fees have or haven’t been included in my calculations?
  • Will my mortgage repayments be more than 30 per cent of my pre-tax income? 

What home loan features are available? 

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There are a range of helpful home loan features that allow you to have the most flexibility in your mortgage, including:

Home Loan Feature

About

Additional repayments

Allows you to lower your total interest and shortens the length of your loan. Some fees may apply.

Interest only repayments

Allows you to pay only for the interest on your home loan first, to reduce mortgage repayments in the short term. Will prevent you from growing equity or making a dent in your principal repayments.

Introductory rate

Lower rate offered to new customers to entice them into joining. This will revert to a higher interest rate once this introductory period is over.

Line of credit

Lets you access the equity in your current home to use for a holiday, renovations etc.

Lump sum repayments

Your lender will allow you to make ad-hoc bulk repayments towards your mortgage (useful if you get a large tax return, or come into some money). 

Offset account

A transaction account linked to your home loan where the balance of the transaction account is offset against the unpaid balance of your loan, to reduce the amount of interest payable. Can involve higher interest rates.

Mortgage portability

You can transfer your loan from your current home to a different property, sometimes reducing fees (establishment fees etc.)

Redraw facility

Allows you to access extra payments you’ve made towards the mortgage by using the equity in your home as security to borrow money. The more money you put into a redraw facility, the less you’ll pay on your home loan.

Split loan

For when you can’t decide whether to have a fixed or variable home loan – split it 50/50. 


What home loan fees could I be charged
? 

There are a range of fees that lenders may charge that you should consider when comparing home loans, as they will impact your overall mortgage cost. These include:

  1. Application fee/up-front cost
  2. Ongoing fee
  3. Additional repayment fee
  4. Late payment fee
  5. Break costs and exit fees
  6. Mortgage discharge fee
  7. Redraw facility
  8. Re-fix fee
  9. Switching fee
  10. Portability fee
  11. Lenders Mortgage Insurance (LMI)
  12. Stamp duty 

Home loan comparison calculator  

RateCity.com.au’s home loan comparison calculators can help you to work out which mortgage is best for your financial needs and budget. 

The simple to use mortgage tool allows you to search via comparison rate, view your estimated monthly repayments for that loan, and learn which features the loan does or does not include. 

 

FAQs

They’re impersonal 

Most comparison sites give you information about rates, fees and features, but expect you’ll pay more with a low advertised rate and $400 ongoing fee or a slightly higher rate and no ongoing fee. The answer is different for each borrower and depends on a number of variables, in particular how big your loan is. Comparisons are either done based on just today or projected over a full 25 or 30 year loan. That’s not how people borrow these days. While you may take a 30 year loan, most borrowers will either upgrade their house or switch their home loan within the first five years. 

You’re also expected to know exactly which features you want. This is fine for the experienced borrower, but most people know some flexibility is a good thing, but don’t know exactly which features offer more flexibility than others. 

What is the flexibility score?

Today’s home loans often try to lure borrowers with a range of flexible features, including offset accounts, redraw facilities, repayment frequency options, repayment holidays, split loan options and portability. Real Time Ratings™ weights each of these features based on popularity and gives loans a ‘flexibility score’ based on how much they cater to borrowers’ needs over time. The aim is to give a higher score to loans which give borrowers more features and options.

They’re not always timely

In today’s competitive home loan market, lenders are releasing new offers almost daily. These offers are often some of the most attractive deals in the market, but won’t get rated by traditional ratings systems for up to a year. 

The assumptions are out of date 

The comparison rate is based on a loan size of $150,000 and a loan term of 25 years. However, the typical loan size is much higher than that. Million dollar loans are becoming increasingly common, especially if you live in metropolitan parts of Australia, like Sydney and Melbourne. It’s also uncommon for borrowers to hold a loan for 25 years. The typical shelf life for a home loan is a few years. 

The other problem is because it’s a percentage, the difference between 3.9 or 3.7 per cent on a $500,000 doesn’t sound like much, but equals around $683 a year. Real Time Ratings™ not only looks at the difference in the monthly repayments, but it will work out the actual cost difference once fees are taken into consideration. 

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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, 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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