Don't settle for any old loan. Learn how to find the best home loan for you.
Finding the best home loan 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.
Home Loan Offer
With the loans.com.au Essentials Variable Home Loan enjoy a home loan with no application or ongoing fees as well as a competitive interest rate. Borrow up to 80% of the property's value. For owner occupiers and principal and interest repayments only.
- Interest rate of 3.64% p.a.
- Comparison rate of 3.66% p.a.
- Application fee of $0
- Maximum LVR: 80%
- Minimum borrowing: $50,000
- Max borrowing: $2,000,000
Compare Our Best Home Loan Rates*
Rates last updated October 17th, 2017.
- ME Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier, P&I)
Interest rate is now 3.84%
September 27th, 2017
- IMB Platinum Package Fixed Home Loan - 2 Year Fixed (LVR < 90% Owner Occupier)
Interest rate decreases by 0.10%
October 4th, 2017
- Tic:Toc Live in Loan Variable Rate
Comparative rate decreases by 0.10% | Interest rate decreases by 0.10%
October 13th, 2017
iConnect Financial mortgage brokers work with a range of well known lenders to find you the right home loan.
- Completely free, expert home loan advice.
- Offers a suite of digital tools to make you a smarter borrower.
- Calculate your borrowing power with a free personalised home loan report.
Aggregator of the Year 2016
Australian Mortgage Awards
* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms "Best" and "Top" are not product ratings and are subject to our disclaimer. The star ratings indicated on this page are from real finder.com.au users based on their feedback about the quality of this page. It is not representative of any product’s star ratings and should not be taken as a recommendation of any form of credit. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
What to look for in the best home loan
- Competitive interest rates
- Low fees
- Flexibility & features
Competitive interest rates
The higher the interest rate, the more you end up paying. While it isn't the only factor to consider, the best home loans typically have a competitive interest rate. You also need to know about how different types of interest rates work.
|Standard Variable Rate|
|Ongoing Discount Rate|
The type of interest rate that's best for you will depend on your circumstances. Fixed interest rates offer more stability while variable rate loans can get cheaper if interest rates go down.
Home loans can take decades to pay off. This means costly ongoing fees can add up to many thousands of dollars over the life of a loan. Different fees to watch out for include:
- Application fees (these are one-off fees)
- Valuation fees
- Discharge fees
- Settlement fees
- Lender's legal fees
- Redraw fees
Flexibility and features
Home loans with added features can offer borrowers more flexibility in how they manage their loan, make their payments or use their credit. Some of the flexible options available to borrowers are:
- Additional or extra repayments. Put extra amounts towards your loan and pay it off faster.
- Redraw facility. Access extra repayments you made on your loan whenever you need the money.
- Offset accounts. A transaction account which reduces the interest you pay when funds are deposited into it.
- Portability. Keep your home loan when moving to a new property, saving on entry and exit fees.
- Family guarantee. Get a home with your family's assistance even without an adequate deposit.
- Sign-up bonuses. Get a helping hand from your lender with a cash bonus or fee waiver on your home loan.
- Professional package. Get a rate discount in exchange for bringing your other banking products over to your lender.
- Split facility. Split your loan into fixed and variable portions to get the benefits of both.
What's the best home loan for me?
The “best” home loan is a very individual proposition. To decide what the best home loan for you might be, you need to consider your individual circumstances. Some things to take into account might be:
- What are your current financial needs? What sort of repayment options can you afford right now? Your interest rate and your loan term will impact your monthly repayments.
- What are your future financial needs? A home loan lasts a long time. To find a home loan that grows with you, you’ll need to think about your needs and wants for now and the future. For young professionals for example, a no-frills home loan with a fixed interest rate could help you get used to repayments. When the fixed rate period ends, you have the ability to refinance to a more flexible home loan as you become a parent or have bigger, financial goals.
- What's the purpose of the loan? Whether you are buying a property as an investment or as your own home can affect grants you are eligible for, and how you manage your repayments and interest at tax time. There can also be some small differences between home loans and residential investment loans so make sure you are comparing the right type of loan where your needs are being met.
Watch: How to compare the best home loans in 3 minutes
How can I get the best home loan as a first home buyer?
It's tough to be a first home buyer in today's market. But don't despair. You just need to research, strategise and save as much as you can. Look at ways to trim your spending in every possible way and try to save as large a deposit as possible. This reduces your repayment costs and opens up options for better loans. A bigger deposit also helps you avoid costly lenders mortgage insurance. Thankfully first home buyers can get a bit of help from the government. Make sure you read up on stamp duty exemptions and first home owners grants you may be eligible for.
I'm a pensioner: what can I do to get the best possible loan?
If you're a pensioner who already owns a home you should look at tapping into the equity in the home with a line of credit loan or a reverse mortgage. It can be harder to get a loan as a low-income pensioner, but many lenders consider various pensions to be a valid source of income. This includes disability pensions and war widow or veterans' pensions.
You can read our full guide to home loans for pensioners here.
Can I get a great home loan if I'm a self-employed borrower?
Self-employed borrowers can have difficulty proving to lenders that they have a stable income. Many lenders require PAYG statements as proof of income and employment. But some lenders will accept alternative documents for income verification.
I can really only save a small deposit but I still want the best loan.
You can still get a good loan with a 5-10% deposit. But you'll probably need to pay for lenders mortgage insurance (LMI). Depending on your circumstances you might be eligible for a no-deposit home loan. But saving a bigger deposit really is the best way to get a better home loan. Why not check out our comprehensive six-part guide to deposit savings below?
Read our ultimate, six-part guide to saving for a home loan deposit.
I have terrible credit history! Can I still get a better loan?
You can! Borrowers can end up with bad credit scores for a variety of reasons. It does make it harder to get a home loan but nothing is impossible. There are a few steps you can take:
- Get your debt under control.
- Look at bad credit home loans tailored for borrowers in your situation.
- Speak to a mortgage broker and get expert help.
More options for borrowers
Finding the best home loan can take a lot of time and energy. Why not get a mortgage broker to do the hard work for you? Mortgage brokers are home loan professionals who compare loans from a wide panel of lenders and can save you time and energy.
I have a few more questions about getting the best home loan
How are home loans different to other types of loans?
- Allows you to own a home. Unlike many other forms of credit, these loans are able to be used to purchase a home, as they have large maximum borrowing amounts and can be secured to property. They also generally have lower interest rates than personal loans or credit cards.
- Lenders have loans for most situations. Depending on your income, savings and financial commitments, most lenders can assist you with financing. This includes borrowers with negative listings on their credit files.
- You can borrow high amounts compared with other loans. Home loans allow borrowers to buy large sums of money, as property is generally a lot more expensive than cars and boats.
- Repayments can be fixed and easily calculated. If you opt for a fixed rate home loan you have the benefit of knowing what your repayments will be for the fixed period. But never fear, even if you have a variable rate you can use our calculator to calculate your repayments.
- Home loans can be flexible. You can make additional repayments, access your redraw facility or opt for an offset account with most variable rate loans. The market has become very competitive, so you can expect to find more feature packed fixed rate home loans popping up also.
- You can tap into your equity. If you've owned your home for a while and have built equity in it (the amount of your home you actually own versus what the bank owns), you can access this equity with a line of credit loan. How you reinvest the money is up to you, though experts recommend that you invest in assets that generate an income.
What fees are associated with home loans?
- Upfront fees. This includes application fees, settlement fees, legal fees and valuation fees paid when opening your home loan.
- Ongoing fees. These fees are charged regularly, for example each month or each year, and are generally service fees and account keeping fees.
- Exit fees. When leaving your home loan you'll generally need to pay discharge fees, and if you have a fixed rate home loan, you'll need to pay break costs too, which are charged by your lender to recoup the costs of you leaving your loan before the agreed term ends.
The fees that come with a home loan will ultimately be up to the lender, but this doesn't mean that they're non-negotiable. With a bit of negotiating or by opting for a package, you can get some of these fees waived. Click here for our comprehensive guide on home loan fees, from application all the way to the exit.