Some of the best home loans in September 2020

Some of the best home loans in September 2020

September is the traditional start of the Spring Selling Season in Australia’s real estate markets. While 2020 remains a challenging year, with economic recession affecting both property buyers and sellers, banks and other mortgage lenders are continuing to slash home loan interest rates to new lows.

If you’ve been waiting for a chance to buy your first home, are looking to upsize or downsize to a house that better suits you and your family, or are ready to start building your property investment empire, RateCity is here to help with some of the top-rated home loan deals, as ranked by our Real Time Ratings™ system.

(Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.)

Best variable rate home loans

Whether you’re wanting to buy your first home or investment property, or refinance an existing mortgage, there are many more variable rate home loan options available in the market than you may expect. Even if you’re not familiar with all the lenders in question, their low interest rates, flexible features, and special offers (including cashbacks) often speak for themselves.

Best small deposit home loans

Interest rates aren’t just down for home loans, but for savings accounts and term deposits too. This can make saving up a home loan deposit that little bit harder, as you won’t be able to earn as much interest on your savings or grow your wealth as quickly.

This is where it could be worth comparing some small deposit home loan options, which may let you apply for a mortgage with a deposit as small as 5 per cent of the property value. Just keep in mind that you may also need to pay for Lender’s Mortgage Insurance (LMI) or get some help from a guarantor to successfully apply for a low-deposit home loan.

Best home loans from large banks

Some of the biggest financial institutions in Australia and around the world are presently offering discounted interest rates on home loans, as they attempt to secure new mortgage customers. But it’s also important to consider what features and benefits are being offered by different mortgage lenders, and whether they can offer you additional value.

Big names such as Suncorp and the Commonwealth Bank are offering thousands of dollars in cashback for eligible refinancers, and HSBC’s offers include discounted variable rates, no ongoing fees, an HSBC Relationship Manager to look after you and a complimentary Feng Shui report on your property!

Best home loans from new lenders

It’s not just the big banks that are slashing interest rates and offering creative features and benefits. Smaller mortgage lenders, including digital only online lenders and app-based neobanks, are competing hard with the majors for your business.

For example, Athena is offering the AcceleRates package, where the more of your property you pay off, the lower your interest rate will drop. And for a limited time only, 86 400 is offering $2000 cashback for low-LVR borrowers.

Remember to always compare different home loan options and consider contacting a mortgage broker or financial counsellor for advice before making any final decisions, as the home loan with the lowest interest rate may not be the mortgage that best suits your personal financial needs.

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Learn more about home loans

Who offers 40 year mortgages?

Home loans spanning 40 years are offered by select lenders, though the loan period is much longer than a standard 30-year home loan. You're more likely to find a maximum of 35 years, such as is the case with Teacher’s Mutual Bank

Currently, 40 year home loan lenders in Australia include AlphaBeta Money, BCU, G&C Mutual Bank, Pepper, and Sydney Mutual Bank.

Even though these lengthier loans 35 to 40 year loans do exist on the market, they are not overwhelmingly popular, as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

How can I get a home loan with no deposit?

Following the Global Financial Crisis, no-deposit loans, as they once used to be known, have largely been removed from the market. Now, if you wish to enter the market with no deposit, you will require a property of your own to secure a loan against or the assistance of a guarantor.

Does Real Time Ratings' work for people who already have a home loan?

Yes. If you already have a mortgage you can use Real Time RatingsTM to compare your loan against the rest of the market. And if your rate changes, you can come back and check whether your loan is still competitive. If it isn’t, you’ll get the ammunition you need to negotiate a rate cut with your lender, or the resources to help you switch to a better lender.

Mortgage Calculator, Interest Rate

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

Mortgage Calculator, Repayments

The money you pay back to your lender at regular intervals. 

How is the flexibility score calculated?

Points are awarded for different features. More important features get more points. The points are then added up and indexed into a score from 0 to 5.

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 Calculator, Loan Term

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

What is a redraw fee?

Redraw fees are charged by your lender when you want to take money you have already paid into your mortgage back out. Typically, banks will only allow you to take money out of your loan if you have a redraw facility attached to your loan, and the money you are taking out is part of any additional repayments you’ve made. The average redraw fee is around $19 however there are plenty of lenders who include a number of fee-free redraws a year. Tip: Negative-gearers beware – any money redrawn is often treated as new borrowing for tax purposes, so there may be limits on how you can use it if you want to maximise your tax deduction.

What happens to your mortgage when you die?

There is no hard and fast answer to what will happen to your mortgage when you die as it is largely dependent on what you have set out in your mortgage agreement, your will (if you have one), other assets you may have and if you have insurance. If you have co-signed the mortgage with another person that person will become responsible for the remaining debt when you die.

If the mortgage is in your name only the house will be sold by the bank to cover the remaining debt and your nominated air will receive the remaining sum if there is a difference. If there is a turn in the market and the sale of your house won’t cover the remaining debt the case may go to court and the difference may have to be covered by the sale of other assets.  

If you have a life insurance policy your family may be able to use some of the lump sum payment from this to pay down the remaining mortgage debt. Alternatively, your lender may provide some form of mortgage protection that could assist your family in making repayments following your passing.

What is breach of contract?

A failure to follow all or part of a contract or breaking the conditions of a contract without any legal excuse. A breach of contract can be material, minor, actual or anticipatory, depending on the severity of the breaches and their material impact.

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

Mortgage Calculator, Loan Amount

How much you intend to borrow. 

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.