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2.29%

Fixed - 3 years

2.65%

UBank

$1.3k

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

2.18

/ 5
More details

2.74%

Variable

2.74%

UBank

$1.4k

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

2.85

/ 5
More details

2.74%

Fixed - 5 years

2.76%

UBank

$1.4k

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

2.12

/ 5
More details

2.64%

Variable

2.59%

Athena Home Loans

$1.4k

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

2.90

/ 5
More details

2.84%

Variable

2.66%

Athena Home Loans

$710

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

2.06

/ 5
More details

2.79%

Fixed - 3 years

4.46%

CUA

$698

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

1.71

/ 5
More details

2.54%

Variable

2.54%

Athena Home Loans

$1.4k

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

3.13

/ 5
More details

3.02%

Variable

3.05%

Yard

$1.4k

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

2.10

/ 5
More details

3.15%

Variable

3.16%

Commonwealth Bank of Australia

$1.4k

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

2.37

/ 5
More details

2.55%

Fixed - 1 year

3.21%

Adelaide Bank

$638

Redraw facility
Offset Account
Borrow up to 79.9999%
Extra Repayments
Interest Only
Owner Occupied

2.09

/ 5
More details

3.29%

Variable

3.71%

NAB

$823

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

1.46

/ 5
More details

Thinking about investing in property? Many people invest in property to enjoy a steady stream of rental income, while their investment hopefully grows in value over time. 

Investment loans are a lot like other home loans, except you won’t be living in the property you buy. However, it's not always easy to secure an investment loan with a very low interest rate.

What rates can I get on an investment loan?

As with owner-occupier mortgages, you can choose an investment loan with:

  • a variable interest rate, which may rise or fall over time, making your repayments cost more or less;
  • a fixed rate, which locks you into a specific repayment for a period of time, or;
  • a split rate, where you pay a mix of variable and fixed interest on your mortgage.

It’s important to remember that the best investment loan for you may not be the one with the lowest interest rate. If you compare different investment loans, you may find an option with features and benefits that offer you extra value.

How does an investment loan compare to other mortgages?

Investment loan rates may be higher than the interest rates for similar owner-occupier home loans, due to the higher financial risks involved. This means it’s important to compare interest rates, fees, features and benefits of different investment mortgage options, to ensure you choose one that suits your needs. 

Two loan types that are popular with investors include:

  1. Interest-only investment loans: For a limited time, your mortgage payments will only cover the interest charges and won’t reduce the amount you owe. This can help keep your repayments more affordable until the interest-only period expires and the loan reverts to principal and interest repayments. 
  2. Line of credit: A mortgage where you can use your equity in the property as security to borrow money. This line of credit works similarly to a credit card with a higher limit, so you can borrow and repay money as you need it, only paying interest on what’s currently owing. 

Before you apply for one of these loans, or other investment options, be sure to consider the features and benefits, as well as the interest rates, fees and other charges, and think about which options may provide the most value in your situation. 

How to get a low interest rate on an investment loan

Most banks and other mortgage lenders offer their lowest interest rates to the most secure borrowers. The lower the risk that you’ll default on your repayments, the lower the rates you may be offered. 

Because investment loans are often considered riskier than owner-occupier home loans, borrowers may need to fulfil strict eligibility criteria to enjoy some of the lowest interest rates. 

To help improve your investment loan application’s chances of being approved, think about the following:

  • Try to save a large deposit: Some investment loans already require larger than average deposits, but the larger the deposit and/or equity you can provide to secure a mortgage, the lower the interest rate you may be offered. 
  • Check your credit score: If you have bad credit, it may be harder to successfully apply for an investment loan. You can check your credit score for free, and consider ordering a copy of your credit report to see if there are any errors that can be corrected. Plus, comprehensive credit reporting means that positive credit behaviours such as paying off other outstanding debts may help improve your credit score.
  • Compare investment loans from different lenders: As well as comparing interest rates, look at the fees, features and other benefits. Consider which investment mortgage options may offer the most value in your financial situation, and check their eligibility criteria to see which ones you’re most likely to qualify for. 
  • Ask for help: Consider contacting a mortgage broker for assistance selecting and applying for an investment loan. Brokers may be able to negotiate with lenders on your behalf to get you a lower rate, and may have access to special mortgage deals that aren’t normally advertised. 

 

Frequently asked questions

What is an interest-only loan? How do I work out interest-only loan repayments?

An ‘interest-only’ loan is a loan where the borrower is only required to pay back the interest on the loan. Typically, banks will only let lenders do this for a fixed period of time – often five years – however some lenders will be happy to extend this.

Interest-only loans are popular with investors who aren’t keen on putting a lot of capital into their investment property. It is also a handy feature for people who need to reduce their mortgage repayments for a short period of time while they are travelling overseas, or taking time off to look after a new family member, for example.

While moving on to interest-only will make your monthly repayments cheaper, ultimately, you will end up paying your bank thousands of dollars extra in interest to make up for the time where you weren’t paying off the principal.

What is the best interest rate for a mortgage?

The fastest way to find out what the lowest interest rates on the market are is to use a comparison website.

While a low interest rate is highly preferable, it is not the only factor that will determine whether a particular loan is right for you.

Loans with low interest rates can often include hidden catches, such as high fees or a period of low rates which jumps up after the introductory period has ended.

To work out the best value for money, have a look at a loan’s comparison rate and read the fine print to get across all the fees and charges that you could be theoretically charged over the life of the loan.

Mortgage Calculator, Property Value

An estimate of how much your desired property is worth. 

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

Why should you trust Real Time Ratings?

Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

If you have any feedback about Real Time Ratings™, please get in touch.

Mortgage Calculator, Repayment Type

Will you pay off the amount you borrowed + interest or just the interest for a period?

What does going guarantor' mean?

Going guarantor means a person offers up the equity in their home as security for your loan. This is a serious commitment which can have major repercussions if the person is not able to make their repayments and defaults on their loan. In this scenario, the bank will legally be able to the guarantor until the debt is settled.

Not everyone can be a guarantor. Lenders will generally only allow immediate family members to act as a guarantor but this can sometimes be stretched to include extended family depending on the circumstances.

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.

Mortgage Balance

The amount you currently owe your mortgage lender. If you are not sure, enter your best estimate.

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

Mortgage Calculator, Loan Term

How long you wish to take to pay off your loan. 

What is a specialist lender?

Specialist lenders, also known as non-conforming lenders, are lenders that offer mortgages to ‘non-vanilla’ borrowers who struggle to get finance at mainstream banks.

That includes people with bad credit, as well as borrowers who are self-employed, in casual employment or are new to Australia.

Specialist lenders take a much more flexible approach to assessing mortgage applications than mainstream banks.

What is a building in course of erection loan?

Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

Mortgage Calculator, Interest Rate

The percentage of the loan amount you will be charged by your lender to borrow. 

What is an ombudsman?

An complaints officer – previously referred to as an ombudsman -looks at formal complaints from customers about their credit providers, and helps to find a fair and independent solution to these problems.

These services are handled by the Australian Financial Complaints Authority, a non-profit government organisation that addresses and resolves financial disputes between customers and financial service providers.

Monthly Repayment

Your current monthly home loan repayment. To accurately calculate how much you could save, an accurate payment figure is required. If you are not certain, check your bank statement.

Does each product always have the same rating?

No, the rating you see depends on a number of factors and can change as you tell us more about your loan profile and preferences. The reasons you may see a different rating:

  • Lenders have made changes. Our ratings show the relative competitiveness of all the products listed at a given time. As the listing change, so do the ratings.
  • You have updated you profile. If you increase your loan amount, the impact of different rates and fees will change which loans are the lowest cost for you.
  • You adjust your preferences. The more you search for flexible loan features, the more importance we assign to the Flexibility Score. You can also adjust your Flexibility Weighting yourself, which will recalculate the ratings with preference given to more flexible loans.

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.

Interest Rate

Your current home loan interest rate. To accurately calculate how much you could save, an accurate interest figure is required. If you are not certain, check your bank statement or log into your mortgage account.

What is the average annual percentage rate?

Also known as the comparison rate, or sometimes the ‘true rate’ of a loan, the average annual percentage rate (AAPR) is used to indicate the overall cost of a loan after considering all the fees, charges and other factors, such as introductory offers and honeymoon rates.

The AAPR is calculated based on a standardised loan amount and loan term, and doesn’t include any extra non-standard charges.