Compare home loans

Are you a home owner or an investor?

If you're borrowing money to buy a home to live in you need an owner-occupier mortgage. If you're buying an investment property you're looking for an investment loan.

Investor mortgages have slightly higher rates but are otherwise more or less the same. It's the purpose behind the mortgage (what you're using it for) that matters.

Are you a refinancer?

What if you already have a mortgage but want to switch to a better deal? This makes you a refinancer. Most loans are available for refinance. They're not separate, specialised products.

If you already have a home loan but want to switch to a new loan with a new lender there's nothing stopping you. But you will need to apply all over again with the new lender.

It's a bit of work but switching to a lower rate can save you a lot of money.

Fixed versus variable?

It's important to decide whether you want a fixed or variable interest rate. Variable rates have more flexibility but your rate can go up (or down) at any time.

Fixed rates let you budget your repayments more accurately because you know your repayments in advance. But they're less flexible. And if you want to refinance a fixed rate loan during the fixed period there is a fixed loan break cost.

Read more about the fixed versus variable decision

What repayment type do you need?

Another decision you'll have to make is your loan's repayment type. Most borrowers in Australia opt for principal-and-interest loans. These loans require you to pay off the money you've borrowed plus interest at the same time.

Interest-only loans offer you an early period where you only pay the interest, not the loan amount itself. This makes your repayments lower early on, but they end up being higher later on. It's a popular option for savvy investors, but be aware that it isn't the best option for everyone.

How do I compare home loan interest rates?

A good home loan comparison starts with a careful look at interest rates. The interest rate is the key component on any home loan. The lower the rate, the lower your repayments will be. It's as simple as that.

Here's the difference in repayments between a 3.50% and a 3.00% interest rate (on otherwise identical loans with 20% deposits and principal-and-interest repayments).

Over 30 years, that 50 basis point difference in the interest rate could save a borrower $39,600 in interest charges. It's huge.

Check out Finder's lowest monthly mortgage rate tracker

What counts as a competitive mortgage rate? It can be hard to judge, especially with rates changing so often. Luckily Finder has made it easier for you.

Every month we analyse all the loans in our database and find some the lowest home loan rates. The graph below shows the lowest fixed and variable rates for home buyers and investors

You can learn more about our data and methodology here. Note that the rates in the graph may be slightly lower than the lowest available rates in our comparison table, but they can help you get a clear sense of what a good deal looks like.

How do I compare mortgage features and fees?

Beyond the interest rate, comparing home loans means looking at fees and the various features that mortgages come with. A loan with the right features gives you more control over your money and unlocks new ways to use your mortgage to your advantage.

Comparison rate

The comparison rate does what its name suggests: it helps you compare a home loan. This rate is a home loan's interest rate, plus the cost of fees taken into consideration. It is a legal requirement to be displayed on all loans. But it's only a hypothetical calculation (and not necessarily that helpful any more).

Features

Not every home loan comes with the same features. But here are the most common and useful ones:

• Offset accounts. A 100% offset account attached to your home loan is a bank account that lets you save and spend money like a normal savings account. But any dollar saved in the account temporarily offsets your loan amount, meaning you are charged less interest. This allows you the flexibility to save your cash while getting a similar benefit you'd see from making extra repayments. Not every loan has an offset account.
• Extra repayments. If your loan allows you to make extra repayments then you can pay it off faster. This will save you in interest charges. These days most loans allow extra repayments, although some fixed rate loans do not.
• Redraw facilities. The redraw facility is common on home loans that allow extra repayments. It's a feature that allows you to withdraw your extra repayments from your loan and spend them if you need them. It's helpful in financial emergencies, but less flexible than an offset account.
• Portability. If your loan is portable that means you can sell your property and buy a new one with the same home loan. You won't need to refinance, which makes life easier.
• Split facility. Some loans allow you to split your mortgage into both fixed and variable portions. This lets you create a flexible loan that offers the best of both fixed and variable rate types.

Loan-to-value ratio (LVR)

Loan-to-value ratio (or LVR) is another way of saying minimum deposit. Most loans have a maximum LVR of 80%, meaning you need a 20% deposit.

However, many loans also have a maximum insured LVR of up to 95%. This means you can get the loan with a smaller deposit, but you will need to pay lenders mortgage insurance (LMI) when your deposit is under 20%.

Fees

It's hard to go through the mortgage process without paying some fees. You should always factor fees in to your home loan comparison.

Examples of home loan fees include:

• Application fees. This is a one-off fee many lenders charge during the application stage.
• Ongoing fees. Some loans come with a monthly or annual fee.
• Valuation fees. This covers your lender's cost to have your property valued by an expert.
• Legal fees. This covers your lender's conveyancing costs.
• Discharge fees. A discharge fee is only charged when you end a home loan, either by refinancing or paying off the loan.

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The Big Four Banks

The Big Four are the dominant players across Australian banking. Even in a crowded lending market most customers stick with the Commonwealth Bank, NAB, Westpac or ANZ. They all offer banking apps, large customer service teams, extensive branch and ATM coverage, and lots of mortgages to choose from. You won't get the absolute lowest rates on earth with the Big Four, but they are always competitive.

Other banks

There's more to mortgages than the biggest players, of course. Most Australian cities and regions have smaller local banks with a range of home loans to consider. And they often cover large areas of the country. There are also large lenders with nationwide service and international banks operating locally in Australia.

Credit unions and non-bank lenders

There is an enormous number of Australian credit unions, non-bank lenders, building societies and other institutions that are member-owned. This means they work for their members and don't pay dividends to shareholders. They're often regional and may not have a presence in every state or territory.

These lenders are usually members of the Customer-Owned Banking Association (COBA), which lists 63 member institutions. Here are some of them:

Digital banks, fintechs, neo-banks and online lenders

There are lenders who do business entirely online (with phone support). Lenders like loans.com.au, Tic:Toc and UBank are examples of online lenders with competitive rates. Some newer players in the market include neobank or fintech lenders like Athena and 86400, which use apps and big data to offer customers a convenient online mortgage experience.

Specialist lenders

Borrowers in unique circumstances may need finance from a specialist lender. This includes bad credit home loans for borrowers with poor credit histories, bridging finance and reverse mortgages for older borrowers.