Compare popular home loans

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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%

Fixed - 2 years

3.28%

Suncorp Bank

$1,314

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

2.93

/ 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

Learn more about home loans

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. 

 

Frequently asked questions

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for 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.

How do I refinance my home loan?

Refinancing your home loan can involve a bit of paperwork but if you are moving on to a lower rate, it can save you thousands of dollars in the long-run. The first step is finding another loan on the market that you think will save you money over time or offer features that your current loan does not have. Once you have selected a couple of loans you are interested in, compare them with your current loan to see if you will save money in the long term on interest rates and fees. Remember to factor in any break fees and set up fees when assessing the cost of switching.

Once you have decided on a new loan it is simply a matter of contacting your existing and future lender to get the new loan set up. Beware that some lenders will revert your loan back to a 25 or 30 year term when you refinance which may mean initial lower repayments but may cost you more in the long run.

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

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 can I calculate interest on my home loan?

You can calculate the total interest you will pay over the life of your loan by using a mortgage calculator. The calculator will estimate your repayments based on the amount you want to borrow, the interest rate, the length of your loan, whether you are an owner-occupier or an investor and whether you plan to pay ‘principal and interest’ or ‘interest-only’.

If you are buying a new home, the calculator will also help you work out how much you’ll need to pay in stamp duty and other related costs.

What is the difference between fixed, variable and split rates?

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

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.

Split rates home loans

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

What are the responsibilities of a mortgage broker?

Mortgage brokers act as the go-between for borrowers looking for a home loan and the lenders offering the loan. They offer personalised advice to help borrowers choose the right home loan for their needs.

In Australia, mortgage brokers are required by law to carry an Australian Credit License (ACL) if they offer credit assistance services. Which is the legal term for guidance regarding the different kinds of credit offered by lenders, including home loan mortgages. They may not need this license if they are working for an aggregator, for instance, as a franchisee. In both these situations, they need to comply with the regulations laid down by the Australian Securities and Investments Commission (ASIC).

These regulations, which are stipulated by Australian legislation, require mortgage brokers to comply with what are called “responsible lending” and “best interest” obligations. Responsible lending obligations mean brokers have to suggest “suitable” home loans. This means loans that you can easily qualify for,  actually meet your needs, and don’t prove unnecessarily challenging for you.

Starting 1 January 2021, mortgage brokers must comply with best interest obligations in addition to responsible lending obligations. These require mortgage brokers to act in the best interest of their customers and also requires them to prioritise their customers’ interests over their own. For instance, a mortgage broker may not recommend a lender who gives them a commission if that lender’s home loan offer does not benefit that particular customer.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

What is an ongoing fee?

Ongoing fees are any regular payments charged by your lender in addition to the interest they apply including annual fees, monthly account keeping fees and offset fees. The average annual fee is close to $200 however there are almost 2,000 home loan products that don’t charge an annual fee at all. There’s plenty of extra costs when you’re buying a home, such as conveyancing, stamp duty, moving costs, so the more fees you can avoid on your home loan, the better. While $200 might not seem like much in the grand scheme of things, it adds up to $6,000 over the life of a 30 year loan – money which would be much better off either reinvested into your home loan or in your back pocket for the next rainy day.

Example: Anna is tossing up between two different mortgage products. Both have the same variable interest rate, but one has a monthly account keeping fee of $20. By picking the loan with no fees, and investing an extra $20 a month into her loan, Josie will end up shaving 6 months off her 30 year loan and saving over $9,000* in interest repayments.

How do I calculate monthly mortgage repayments?

Work out your mortgage repayments using a home loan calculator that takes into account your deposit size, property value and interest rate. This is divided by the loan term you choose (for example, there are 360 months in a 30-year mortgage) to determine the monthly repayments over this time frame.

Over the course of your loan, your monthly repayment amount will be affected by changes to your interest rate, plus any circumstances where you opt to pay interest-only for a period of time, instead of principal and interest.

How much are repayments on a $250K mortgage?

The exact repayment amount for a $250,000 mortgage will be determined by several factors including your deposit size, interest rate and the type of loan. It is best to use a mortgage calculator to determine your actual repayment size.

For example, the monthly repayments on a $250,000 loan with a 5 per cent interest rate over 30 years will be $1342. For a loan of $300,000 on the same rate and loan term, the monthly repayments will be $1610 and for a $500,000 loan, the monthly repayments will be $2684.

Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

Can I change jobs while I am applying for a home loan?

Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

Can I get a home loan if I am on an employment contract?

Some lenders will allow you to apply for a mortgage if you are a contractor or freelancer. However, many lenders prefer you to be in a permanent, ongoing role, because a more stable income means you’re more likely to keep up with your repayments.

If you’re a contractor, freelancer, or are otherwise self-employed, it may still be possible to apply for a low-doc home loan, as these mortgages require less specific proof of income.

Will I have to pay lenders' mortgage insurance twice if I refinance?

If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments. 

If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.

Is there a limit to how many times I can refinance?

There is no set limit to how many times you are allowed to refinance. Some surveyed RateCity users have refinanced up to three times.

However, if you refinance several times in short succession, it could affect your credit score. Lenders assess your credit score when you apply for new loans, so if you end up with bad credit, you may not be able to refinance if and when you really need to.

Before refinancing multiple times, consider getting a copy of your credit report and ensure your credit history is in good shape for future refinances.

I have a poor credit rating. Am I still able to get a mortgage?

Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.

I can't pick a loan. Should I apply to multiple lenders?

Applying for home loans with multiple lenders at once can affect your credit history, as multiple loan applications in short succession can make you look like a risky borrower. Comparing home loans from different lenders, assessing their features and benefits, and making one application to a preferred lender may help to improve your chances of success