By looking carefully at interest rates, fees and features you can find the cheapest home loan that works for you and saves you thousands.
Cheapest Home Loan Offer
Macquarie Bank Basic Home Loan - LVR up to 70% (Owner Occupier, P&I)
variable rate
comparison rate
Cheapest Home Loan Offer
A simple mortgage with no application or ongoing fees that has extra repayments plus split and redraw options. Requires a 30% deposit.
- Interest rate of 3.44% p.a.
- Comparison rate of 3.44% p.a.
- Application fee of $0
- Maximum LVR: 70%
- Minimum borrowing: $150,000
- Max borrowing: $5,000,000
Start your search for a cheaper home loan now
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Five ways to get the cheapest home loan
Find the lowest interest rate
Getting a lower interest rate is one of the best ways to save on your loan. Even a difference of a few basis points saves you thousands over a 30-year mortgage. Here are some tips to help you compare rates:
- Variable versus fixed rates. Variable loans usually have lower rates and offer more flexibility than fixed loans. But you can find very competitive fixed rate loans too. If rates rise while you're still on a fixed loan, you may end up with a more competitive rate.
- Introductory rate discounts. Look out for loans with discounted introductory interest rates. These might be some of the lowest loans on the market. Just watch out for fees and be ready to switch if your rate jumps up.
- Non-bank lenders. Loans from smaller, non-bank lenders are more likely to have lower rates. But the mortgage market is so competitive that even the big banks are offering comparably low rates.
- Negotiating. Once you've chosen a mortgage you can ask for a discount. It never hurts to ask.
A fast way to find some of the lowest current rates is to check out our monthly low rate mortgage round up . Here, finder collects the lowest rates available on our site each month, with information on fixed, variable, owner occupier and investor rates.
Get a loan with low fees
Most mortgages come with fees. These are separate from the interest rate and your repayments, but they are calculated into a loan's comparison rate.
Upfront, one-off fees (like application fees) can seem expensive, but smaller, ongoing fees can cost you more in the long run.
So should I avoid fees at all costs?
Not always. You need to crunch the numbers and work it out for yourself. If a loan has a low rate and features you need (like an offset account), then it might be worth paying the fee.
Some fees only come at the end of the loan or when switching lenders. Keep this in mind if you're planning to refinance (which you probably should).
Get features that save you time (and money)
Home loans with the lowest interest rates often have fewer features. But the right features can help you get more out of your home loan and save you money. It depends on your strategy.
- Offset accounts. An offset account is a transaction account linked to your home loan. It reduces the amount of interest you're repaying. For example, if you borrow $200,000 and save $10,000 in a 100% offset account, you will only pay interest on $190,000. You can use the offset account funds if you need to spend them, but then you'll have to pay interest on the full amount.
- Loan portability. This feature lets you move your loan to a new property without the high costs of exiting a loan and taking out a new one.
- Unlimited extra repayments. Some lenders charge penalty fees when you make extra repayments. The most affordable home loan could be the one that lets you pay it off in your own way, so watch out for repayment fees. Note that while most lenders allow you to pay variable rate home loans off early with no problem, fixed loans will charge a penalty fee known as break costs.
Save a bigger deposit
The bigger your deposit, the less you have to borrow. This makes for cheaper repayments. In some cases, a bigger deposit unlocks lower rates. Most mortgages require a deposit between 5% and 20% of your property's value. If you borrow with a deposit that is less than 20% of your property's value, you will need to pay lenders mortgage insurance on top of your loan.
Having at least 20% of your property's value as a deposit saves you money. If you have a 30% deposit, you could get an even lower interest rate, but that's unrealistic for many home buyers.
Take a closer look at your repayments
Your repayment structure has a big effect on the cost of your loan. Principal and interest loans result in bigger monthly repayments but are cheaper in the long run. Interest-only loans have much cheaper repayments during the interest-only period but higher repayments afterward. This costs you more over time.
Shorter loan periods
The faster you pay off a home loan, the less interest you pay over time. So even though the repayments for a 25-year home loan might look high compared to those of an identical 30-year home loan, the savings would be higher.
Check out the difference in the total cost of two loans below:
A 25-year mortgage has higher repayments, but works out to be cheaper in the long run because you pay less interest.
I have a few more questions about getting the cheapest home loan
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I have just paid off my house worth approx $800-850k. I am looking at ways besides dying to assist my two children into getting into a property. Can you expand on the family pledge home loan as they both have not got a deposit or another product in which I can assist with them getting into the property market?
Thanks.
Hi Keith,
Thank you for getting in touch with Finder.
Please see this page for more info on guarantor loan. Basically, you can assist your kids to get a deposit together. For example, the child saves 5% or 10% of a property’s value, and the parent can use the equity in their house to cover the other 10-15%. The child pays back the whole loan (including the amount guaranteed by the parent) Once the parent’s part of the deposit is repaid by the child, the parent/guarantor is usually free from any other debt even if the child can’t repay the rest. But the big risk is if the child can’t repay the loan (including deposit) the parent/guarantor may have to repay it.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
Good afternoon!
I am a small investor and have two rented properties. I am enquiring as to what the average percentage rate should be on a current loan please.
Hi Rexjay,
Thank you for getting in touch with Finder.
Please check out this page to compare investment home loan rates. Kindly proceed to the comparison table. Please enter the loan amount and the loan term then click the orange Calculate button to start comparing your loan options. From the page I sent you, the comparison rate starts from 3.99% to 5.35%.
I also suggest that you seek help from a mortgage broker since you’re looking for providers that offer the cheapest rate.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
A mortgage broker has suggested a home loan from a company called BlueBay – I have never heard of them before. Are you able to provide any information?
Thanks.
Hi Lee,
Thank you for getting in touch with finder.
Kindly refer to this page to learn more about Parent Assist Home Loan. As per the said page, the Parent Assist Home Loan is a product offered through a single Australian lender, Bluebay Home Loans.
I hope this helps.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni
H! I need the following information concerning I to need to get $32.000.00 dollars. Is their anybody out there who can lend me money because I’m on new start allowance? I have an excellent credit score would I be able to get a cheap loan on 5 to 6 weeks at the most.I would appreciate a reply as soon as possible because this is really urgent.
Hi Norberto,
Thank you for your question.
I understand the situation you currently have and would advise for you to visit this link to check on loans for unemployed users. You may need to reach out directly to the lender to check what they consider as income during your application of the loan. Hope this helps!
Cheers,
Reggie
I have a $230,000 mortgage on a $900,000 house.
I also have a $600,000 inheritance coming when probate currently in progress settles.
Is there a lender who will give me a line of credit loan 0f $350,000 so I can pay off my present mortgage and have money until probate settles?
I am currently unemployed.
Hi Poida,
Thanks for your message.
While we can provide you with general information, please note that we’re a product comparison website and we do not represent any company we feature on our site. We’re here to assist you in your buying decision process hence we cannot recommend product / service that is rightfully fit for you.
Being unemployed may post risks or roadblocks when you apply for refinancing. Before putting in an application, it would best if you talk to a mortgage broker to guide you in this process.
Cheers,
Nikki
Hi. I just wanted to know is there any reason why Reduce home loans are no longer on your home loan comparison site ?
Hi Dennis,
Thanks for leaving a question on finder.
Reduce Home Loans is not a bank nor a lender. Reduce Home Loans is a licensed and regulated finance brokerage that sources home loans from a variety of Australian lenders. Because Reduce Home Loans is an online-only business, it has low overheads and can offer lower rates. And because it can source funding from a variety of Australian lenders, it can offer competitive products to borrowers. However, we have a dedicated page about RHL here.
Cheers,
Joel
I am looking to purchace a house in the uk, I have a fully owned unit in Sydney with an approximate value of $900,000 . I would require a loan of $300,000 as I am 80 years of age would a loan for this sum be possible.
Hi Stanley, thanks for your inquiry.
Loans for purchasing property overseas are possible. Some options include:
-Banks in Australia with foreign branches.
-Non-Australian owned foreign banks that provide loans.
-Mortgage brokers in Australia and abroad.
Since your unit is fully owned, this should be a positive factor in sourcing equity to purchase overseas.
We would recommend speaking to a licensed mortgage broker to further discuss your options.
Best,
Jonathan
cheapest interest on reverse mortgage loan ?
Hi Peter!
Thanks for the comment.
You may use this comparison page that we have for Reverse Mortgage to shop around with the rates from different lenders.
Just click “More Info” green button if you wish to proceed with a specific lender.
Hope this helps.
Cheers,
Jonathan
Looking to refinance a investment unit and pay to off in 4/5 years.
Pay fortnightly $1300 . Looking for a home loan to achieve this,
Hi John,
Thanks for your question.
If you are looking for a refinancing home loan for investment properties, you may compare your options on this page.
Cheers,
Anndy
If you are on a pension and own 90 percent of your home is a loan permitted
Hi Elaine,
Thanks for your inquiry.
Yes, pensioners are able to apply for home loans. The image below shows what options are available for you.
For information on eligibility, requirements, and application process. You can visit this page. – https://www.finder.com.au/home-loans-for-pensioners –
If you have further concerns you may want to Reach out to a Broker which can give you a professional assessment and will guide you through the application.
Hope this information helped.
Cheers,
Arnold