From razor-sharp interest rates to $0 application fees and flexible mortgage features, learn how to find the best home loan for you.
Finding the perfect mortgage for your situation can help you save money and pay off your mortgage faster. This guide will tell you what features to look for in the best home loans and teach you how to determine your home loan needs. Or you can start comparing loans in the table below.
UBank UHomeLoan Variable Rate - Discounted Rate
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees. Get $1,000 cash into a USaver account when you apply for a loan of $200,000 or more (new or refinance). Terms and conditions apply.
- Interest rate of 3.69% p.a.
- Comparison rate of 3.69% p.a.
- Application fee of $0
- Maximum LVR: 80%
- Minimum borrowing: $200,000
- Max borrowing: $700,000
Compare home loan rates
- IMB Budget Home Loan - Special LVR <=90% (Owner Occupier, P&I): 3.69% p.a. comparison rate. Low rate, low deposit loan.
- NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special: 4.86% p.a. comparison rate. Competitive variable rate with package discounts from a Big Four bank.
- loans.com.au Essentials - Variable (Owner Occupier, P&I): 3.66% p.a. comparison rate. Low interest rate mortgage with low fees from an online lender.
- Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier): 4.49% p.a. comparison rate. Discounted, low rate that's fixed for the first year.
Your guide to finding the right mortgage
How do I compare mortgages to get the best deal?
- The lowest interest rates. A lower interest rate means lower repayments. Shaving just a few points off your interest rate can unlock enormous savings over the life of a 30-year mortgage. You can easily sort loans by lowest rate in the table above.
- Limited fees. Fees are also something you need to check when comparing. A home loan that hits you with multiple fees is probably going to cost you more than you realise over time. Check a loan's comparison rate to get a better idea of the added cost of fees.
- Features you need. Home loans with added features can offer you more flexibility in how you manage your loan and make repayments. Offset accounts can help you cut down your interest repayments. Package loans let you bundle your mortgage with other financial products (like transaction accounts and credit cards) for convenience and discounts. Redraw facilities let you take out extra money you've paid into your mortgage to use in emergencies.
What's the best home loan for me?
- What is your current financial situation? Take a hard look at your savings, income and expenses to work out how much you can afford to borrow. Be realistic, calculate your monthly repayments and factor in future rate rises to make sure you don't get stuck with repayments you can't afford.
- What is your property strategy? The best mortgage is one that matches your buying intentions. If you're a young first home buyer with limited funds you're looking at a very different mortgage product compared to a middle-aged investor buying their second or third property.
- What are your future financial needs? Your needs change over time. You might want a basic, no-frills loan now and one with more features later on as your income increases. A flexible home loan might serve you well for years into the future, provided the interest rate remains low. But you can always refinance to a better loan later. With this in mind, a loan that has high discharge or switching fees will penalise you for refinancing.
Finding the best mortgages for different borrowers
Here are several scenarios featuring different borrowers. They're all looking for the best loan, but they all need something a little different.
The cash-strapped first home buyers
Sarah and Ted are in their late 20s and currently renting. They've saved up $100,000 but because they live in Sydney this isn't a very big deposit.
The best home loan for this young couple:
- Has a low interest rate. They cannot afford massive repayments.
- Is a low deposit loan. They probably haven't saved a 20% deposit so they'll need a loan with a maximum insured LVR of 90 or 95%.
- Has a guarantor option. Alternatively, Sarah's parents may be willing to guarantee a portion of their deposit. So a loan that allows for guarantors is a great option.
The cautious investor
Margaret is currently paying off her home. She wants to buy a unit as an investment. She has $200,000 in equity and will use a line of credit loan to cover her deposit. But she'll need a loan to buy the unit. She is less concerned with fast capital growth and more concerned with long-term income from rent.
The best loan for Margaret:
- Is an investment loan. She cannot purchase an investment property with an owner-occupier loan.
- Has a competitive interest rate. Investment loans have higher interest rates, so she needs to shop around for the best deal.
- Has limited features. As her current loan has an offset account, and paying off this debt is her priority, Margaret doesn't need a full-featured loan.
The ripped-off refinancer
David is paying off a $1 million mortgage. He hadn't looked at his interest rate in a while and was shocked to learn that the rate has jumped well above 4%. His current loan is a basic, no-frills variable loan without many extra features.
David wants to refinance to a loan that:
- Has a much lower interest rate. This could save David thousands of dollars a year.
- Has low fees. David's current mortgage has a hefty discharge fee. He wants to switch to a mortgage that doesn't slug him with more costs.
- Has an offset account. David has managed to put away a bit of extra money while making repayments. He wants to put this cash into an offset to lower his interest repayments.
The above scenarios are generalised examples only.
Yes, they can. While comparing for yourself is easy, finding the right home loan can take a lot of time and energy. Mortgage brokers are home loan professionals who compare loans from a wide panel of lenders. They can find you a product that matches your financial needs and property strategy and also help you with your application. A broker's services are free because they receive a commission from the lender.
I have a few more questions about getting the best home loan