How to choose your next home loan

House with lawn.

Whether you’re upgrading to a bigger house or just refinancing, you may need more from your second home loan than your first.

When people look for a home loan to purchase their first property, their primary concerns are generally affordability and accessibility. If the loan is a good price and they qualify, that’s often enough to keep a first-time buyer happy. Understanding exactly how the loan works can be something of an afterthought.

When the time comes to take out your next loan, you will be more aware of precisely what features you are looking for. You might be upgrading to a bigger property or looking to refinance. Whatever the reason, you’ll probably be searching for a loan that provides more options and flexibility. Here are five essential features you should ensure are included in your next home loan:

1. Offset accounts

Offset infographicFirst-home buyer loans often focus on the bare essentials. They sometimes eschew fancy features for the sake of a lower rate or fees. However, some of these inclusions are well worth the extra cost, because they can save you tens or even hundreds of thousands of dollars in the long run.

An offset account is one such feature. It allows you to save thousands in interest over the life of your loan, and potentially pay off your home loan years ahead of schedule.

An offset account is a transaction account linked to your home loan. It works by deducting the amount on which interest is calculated by the amount of funds in the account. For example, if you have a $500,000 home loan and $50,000 in an offset account, you’ll only be charged interest on $450,000. Your repayment amount won’t change, but what will change is the proportion of your repayment going toward the principal. This mean you’ll pay down your home loan debt faster.

Offset accounts sometimes come with associated account-keeping fees, or form part of home loans that carry a slightly higher interest rate. But there are still some incredibly competitive deals. When you weigh up the impact it can have on the amount of interest you end up paying, an offset account is well worth looking for in your next home loan.

Compare home loans with offset accounts

2. Flexible repayments

When searching for your next home loan, choose one that has the flexibility to fit your lifestyle.

Since you now have the experience of making repayments associated with your first home loan, you will have a better idea of the kind of repayment schedule that would work best for you.

For instance, you might want a product that offers flexibility with repayments, perhaps one that offers the ability to make additional repayments. It’s wise to get ahead on your home loan if you can, and helps you breathe a little easier. Building up a repayment buffer could be a lifesaver if you ever find yourself facing financial hardship.

On the other hand, you may want the option of being able to take a break from repayments if a major life event makes it difficult to meet your obligations.

A home loan that allows you to schedule repayments around your pay periods can also be beneficial. If you get paid fortnightly, a home loan that allows fortnightly repayments could be a great option. It also has the benefit that fortnightly repayments allow you to pay off your home loan faster.

You should also consider a loan that includes a redraw account. This allows you to withdraw any additional funds you’ve paid should you need to use them for any purpose.

3. Option to split

When you selected your first home loan, one of the major choices you would have faced would have been whether to go with a variable or fixed rate. The good news is that for your next home loan, you don’t have to choose.

A home loan with a split facility means you can split the loan into variable and fixed-rate portions. This means part of the loan offers you the flexibility and features common to a variable-rate home loan, while part of it provides the certainty and security of a fixed rate.

Some lenders offer multiple splits, which allows you to take advantage of the rates and features from several products offered by that lender.

Start comparing split rate loans

4. Portability

Portable loanWhen you bought your first home, you probably weren’t looking ahead to the time when you would need to move on to a larger property, because your family had grown and your requirements had changed.

When you choose your next home loan, do so with an eye to the future. Your next house may not be your last, and if you move again, it’s handy to have a home loan that can move with you.

Portability allows you to transfer your home loan from one house to another. This is an incredibly handy feature, because it saves you the time and money it takes to refinance an entirely new loan.

You may well be intending to stay in the home you’re moving to for the rest of your life. However, choosing a home loan that’s portable means you’re prepared for any contingency.

5. Easy access

If your first home loan was a basic, no-frills agreement that focused on rate rather than features, odds are it was fairly “set and forget”. To get the most out of your next loan, you need to take charge.

Helpful features such as an offset and redraw account need to be easily accessible, so make sure you have easy online access to your loan.

Online banking will allow you to keep tabs on and manage your home loan. Depending on your preference, you might want a loan that comes with phone banking. Or, if you prefer a personal touch, look for a lender that has an extensive branch network so you can speak to someone face to face.

Whichever platform you favour, make sure your next home loan offers easy access so you can stay in control.

Use your experience

Selecting and managing your first home loan is usually a learning experience. When you look for your next loan, you can use the lessons you have learned to find one that does everything you need it to do.

Start comparing refinance home loans now

Rates last updated May 23rd, 2018
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% p.a.
Offset account
Split account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Maximum Insured LVR Amount Saved Short Description
3.69%
3.69%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
3.64%
3.67%
$0
$0 p.a.
80%
A mortgage with a competitive variable rate, limited fees and plenty of flexibility.
3.69%
3.69%
$0
$0 p.a.
70%
Pay no application or ongoing fees and get a flexible loan with the ability to split up to 6 times.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.62%
3.62%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).
3.64%
3.64%
$0
$0 p.a.
70%
Get a discount for keeping your LVR at 70% or below with this innovative online lender.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
Get a 100% offset account to save on interest charges, and pay no application fee.
3.69%
3.71%
$0
$0 p.a.
80%
A great interest rate home loan offer with unlimited redraw and unlimited extra payments.
3.69%
4.06%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
3.70%
4.13%
$0
$395 p.a.
90%
Package your loan with an eligible credit card for discounts on rates and fees, and get a 100% offset account.
3.88%
4.89%
$0
$395 p.a.
95%
Low deposit home loan. Enjoy flexible repayment options while paying limited fees.
3.77%
3.81%
$200
$0 p.a.
95%
A simplified mortgage with a low interest rate and a redraw facility.
3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.69%
3.94%
$0
$248 p.a.
70%
Get a sharp rate and a 100% offset account. Borrowers must have a 30% deposit.
3.68%
3.69%
$0
$0 p.a.
95%
This variable rate loan offers flexible repayments and a redraw facility. Available with a 5% deposit.
3.79%
3.79%
$0
$0 p.a.
80%
Pay no application and ongoing fees with Macquarie Bank Basic Home Loan.
3.49%
4.49%
$0
$395 p.a.
90%
Loans over $150k get a discount off an already low fixed rate. Available for NSW, Qld and ACT residents only.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $900 cashback on this loan with a 100% offset account and a redraw facility.
3.69%
3.73%
$600
$0 p.a.
95%
Variable rate home loan from one of the big 4 banks. Available with just a 5% deposit.
3.74%
3.74%
$0
$0 p.a.
110%
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.79%
3.81%
$0
$0 p.a.
90%
Buy your home with just a 10% deposit, few fees and a reasonable interest rate.
3.73%
3.73%
$0
$0 p.a.
80%
Get a 100% offset account and pay no application or ongoing fees on this special variable rate for owner-occupiers.
3.69%
4.47%
$0
$395 p.a.
90%
A fixed rate loan with a 100% offset account and the option to make additional repayments. Loans over $150k receive a discounted rate. NSW, QLD and ACT residents only.
3.74%
3.74%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule.
3.65%
3.66%
$0
$0 p.a.
80%
This special rate loan comes with no application or ongoing fees, and offers a flexible repayment schedule.
3.78%
3.78%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.69%
4.11%
$0
$395 p.a.
80%
Save on interest with a 100% offset account and save on other ME products with this package loan.
3.89%
4.87%
$0
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying and pay no application or ongoing fees.
4.14%
4.81%
$0
$0 p.a.
80%
Pay no application fees and access a fee-free redraw facility with this fixed rate loan.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.85%
4.05%
$0
$350 p.a.
95%
This high LVR fixed rate loan allows you to borrow up to 95% of the value of the property you're buying.
4.09%
4.11%
$0
$0 p.a.
80%
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Points on your mortgage (for a limited time, subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
4.09%
4.12%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and get flexible repayment options and a redraw facility.
3.99%
4.03%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and pay no application or ongoing fees.
3.59%
4.42%
$600
$0 p.a.
95%
Get a 1% discount for the first two years of your loan and pay no application or ongoing fees.
3.68%
3.69%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
4.39%
5.42%
$300
$10 monthly ($120 p.a.)
95%
Lock in a fixed interest rate term for repayment certainty.
3.89%
4.97%
$0
$395 p.a.
95%
Get discounts on a range of Commonwealth Bank products and enjoy the option of fee-free extra repayments during the fixed term.
3.89%
4.96%
$0
$395 p.a.
95%
Refinancers can get $1,500 cashback. Conditions apply. Package your home loan with a Qantas rewards earning Amplify credit card.
3.89%
4.88%
$0
$395 p.a.
95%
Refinance from your existing loan and get a $1,250 rebate. Terms and conditions apply. Plus get discounts on a range of Westpac products.

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Credit services for Aussie Select, Aussie IQ and Aussie Optimizer products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 ("Aussie"), and its appointed credit representatives. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133 Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Optimizer products is provided by Perpetual Limited ABN 86 000 431 827 (Lender). Credit for Aussie IQ is provided by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502. Home loans issued by the Lender are serviced by Macquarie Securitisation Limited ABN 16 003 297 336, Australian Credit Licence 237863 (MSL).

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Important Information*
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special

Start your home buying journey with 2 years of fixed repayments and a reasonable rate from a big 4 bank. Available with a 10% deposit.

UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupied Variable P&I Rate — borrowing $700,000 or more

Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier)

Loans over $150k get a discount off an already low fixed rate. Available for NSW, Qld and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier, P&I)

New borrowers or refinancers from another lender get a discounted rate with this package loan.

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