Our top pick for
Refinancers
| 1.99 | % p.a. |
variable rate
| 2.70 | % p.a. |
comparison rate
Home buyers can lock in this low fixed rate for two years. This loan also allows extra repayments. Requires a 20% deposit.
Best home loan rates
Every month we analyse 100+ mortgages in our database to select our best home loan rates for refinancers, first home buyers and investors.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Want the best home loan rate for you? We've looked at fees, features and interest rates to find some of the most competitive home loan offers on the market right now. Check out our top picks for April or compare rates for yourself.
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Our top pick for
First home buyers
| 1.98 | % p.a. |
variable rate
| 2.79 | % p.a. |
comparison rate
Get a low fixed interest rate and buy a property with just a 5% deposit. This loan lets you split your rate and has a redraw facility.
Our top pick for
Investors
| 2.09 | % p.a. |
variable rate
| 2.60 | % p.a. |
comparison rate
Pay no ongoing fees on this competitive investment loan and fix your rate for 3 years.
Methodology: How we chose our top picks
For our top home loan picks, we compared all the home loan products offered by our commercial partners in April 2021. This includes loans from large and small lenders. Our methodology analyses each loan based on how competitive the interest rate is and also takes the cost of various fees into account. Keep in mind that our top picks may not always be the best for you, and you're encouraged to compare for yourself to find one that works for you. Read our full methodology here to find out more.Compare some of the best home loan rates on the market
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Disclaimer
*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.
Finder's top home loan rate picks for April 2021
Top pick for refinancers: loans.com.au Fixed - 3 Year Fixed Special (Owner Occupier, P&I)
Switching to a rate under 2% and locking it in for three whole years represents excellent value in the current market. With very limited fees and a 100% offset account, this loan is a good deal.
Top pick for first home buyers: Sydney Mutual Bank Special Fixed Home Loan - 3 Year (Owner Occupier, P&I)
Fixing your rate for 3 years under 2% is a great start to a home loan. The fact that it's also available with just a 5% deposit makes it a very compelling home loan for first home buyers.
Top pick for investors: UBank UHomeLoan - 3 Year Fixed Rate (Investor, P&I)
This investment loan from online lender UBank lets investors lock in a competitive rate for three years and pay minimal fees. You will need a 20% deposit. With a low minimum loan amount this loan is also a good choice if you're looking to fund a smaller investment purchase.
How did we choose our top home loans picks?
Finder compares home loans from across the market. Every month, we examine the home loans offered by our commercial partners and select our top picks. Our selections are based on an objective criteria. While the best home loan looks a little different for every borrower, our methodology considers interest rates, fee costs and loan purpose. These are important factors for every borrower.
Keep in mind, however, that our top picks may not always be best for you. Based on your situation, you may find certain loan features to be more or less important. Always compare your options before you apply.
We compared all home loans currently offered by our commercial partners. This is a selection of lenders that includes large banks, credit unions and smaller online lenders. But we do not examine every loan in the market. You may find a loan with a lower rate or more suitable features somewhere else.
Our top picks are divided into three categories based on different borrower's needs:
Your individual circumstances and financial needs may differ from other borrowers, so always research widely and choose a product that suits your circumstances.
What is the best home loan for you?
David Smith, Chief Customer Officer of mortgage broking firm Aussie, says when you're deciding which home loan to get, it pays to keep in mind that every borrower is different.
"It's fair to say it's going to be one of the biggest decisions you'll ever make. It's one of the most complex, too," Smith explains.
"The first consideration you should make when choosing a home loan is to understand how much you can afford. That doesn't just mean the maximum amount you can borrow – it also means the maximum you're prepared to pay each month for your loan repayment."
From there, you can plan a budget with your home loan repayments in mind.
"Don't forget, when you purchase a property, there are a number of other upfront costs to cover, including stamp duty – so make sure you factor those extra costs in too," Smith says.
Here are some examples of typical borrowers. While all borrowers are looking for the best home loan to suit them, they all need something a little different.
The cash-strapped first home buyers
Our hypothetical first home buyers Sarah and Ted are in their late 20s and currently renting. They've squirrelled away their money for four years and 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 will ideally have the following:
- 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 or Tom's parents may be willing to guarantee a portion of their deposit, so a loan that allows for guarantors is a great option.
With these criteria, Sarah and Ted find a low rate loan with a high LVR. They ask their lender if it accepts guarantors, which it does. Sarah's parents guarantee 15%, so they only need a 5% deposit and they can avoid paying lenders mortgage insurance. The loan they choose does come with a hefty application fee, but they decide it's worth paying because everything else about the loan is perfect for them.
Although the idea of saving a big deposit may be intimidating, the First Home Buyers Deposit Scheme means you only need to save a 5% deposit to get your foot on the property ladder.
And as David Smith from Aussie says, with low interest rates on offer and a number of other state and federal government incentives available, this could be the ideal time to get into the market.
"First home buyers could be paying less in mortgage repayments than you would in rent in the same suburb, according to Aussie's Buy vs Rent 2020 Report released in early November 2020," Smith says.
The cautious investor
Until recently, investors have been accustomed to paying far more than owner-occupiers for their property loans. But that's no longer the case, with very competitive investment loans available, and banks once again vying for investors' business.
"If you're already a homeowner or an investor wanting to refinance or upgrade, housing affordability has never been cheaper than it is today, thanks to these record low interest rates that are expected to stick around for at least another three years," Smith says.
In our hypothetical example, Margaret is currently paying off her home. She wants to buy a unit as an investment. She has $400,000 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 will have the following:
- 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 Margaret doesn't have much left in savings, she isn't able to put money into an offset account, so she doesn't need to pay extra for a full-featured loan that she won't use.
Margaret talks to a mortgage broker who helps her organise the line of credit loan and an investment loan.
The homeowner who is paying too much in interest
Our final hypothetical example, David, is paying off a $1 million mortgage with a 30-year loan term. He has been repaying the loan for 10 years. David hadn't looked at his interest rate in a while and was shocked to learn that the rate is above 3.30% – when he sees advertisements for other banks and lenders that begin with 1%. His current loan is a basic, no-frills variable loan without many extra features.
David wants to refinance to a loan that has the following features:
- 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.
David finds a low-fee variable rate home loan that has a 100% offset account. While his previous rate was around 3.30%, his new rate is 2.59%. He's now paying less interest each month.
Importantly, David doesn't refinance to a new 30-year loan term. Because he has been making repayments for 10 years, he refinances to a 20-year term. This makes his repayments a little higher than they would be on a 30-year term, but because he's not adding any new debt to the loan, his repayments won't go up – in fact, with the interest rate reduction, they should go down. This ensures he will stay on track to be debt-free faster (switching to a new 30-year loan would add 10 years to the loan).
How do I get the best deal on a home loan?
There are three things every borrower needs to look at when hunting for the perfect home loan: rates, fees and features.
The lower the rate, the better
The best home loan will always have a low interest rate. The interest rate determines your borrowing costs, and the lower the rate, the less interest you pay each month. Anyone looking for the best home loan deal needs to start with the rate.
Here's how it works. Let's say your loan amount is $500,000. You choose a variable rate with a 30-year loan term and principal-and-interest repayments (this means you repay the loan amount plus interest at the same time). Here's what your monthly repayments look like with differing interest rates:
| Interest rate | Monthly repayment |
|---|---|
| 4.00% | $2,387 |
| 3.75% | $2,315 |
| 3.50% | $2,245 |
| 3.25% | $2,176 |
| 3.00% | $2,108 |
| 2.75% | $2,041 |
But there's more to a good home loan than the interest rate.
Avoid big fees
A home loan that hits you with multiple fees is probably going to cost you more than you realise over time. There are one-off, upfront fees such as application or settlement fees. Some home loans charge an ongoing monthly or annual fee.
Most of the time these fees seem small in comparison to your repayments, but they do add up. And because many home loans have minimal fees, it's better to avoid fees if you can.
Check a loan's comparison rate to get a better idea of the added cost of fees.
The right loan type for your strategy
It's important to get the right kind of home loan. If you're a property investor then you need an investment loan. You won't be able to apply for an owner-occupier loan.
You also need to look at your repayment type. Most borrowers go for principal-and-interest loans, where you borrow money and repay it, plus interest. This is the safest way for most borrowers.
But you can also consider an interest-only loan. With this repayment type, you only pay the interest charges at first. But you'll need to repay the full amount later. It costs you less in the short term and more in the long run. It's a popular option for investors, but some homebuyers choose it too.
Mortgage 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.
- Loan portability lets you move your home loan from one property to another without refinancing.
Need more help? Talk to a broker
Finding the right home loan can take a lot of time and energy. Mortgage brokers are professionals who compare home 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.
Talk to a qualified mortgage broker today.
Compare more home loan options here
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I have a home loan for my current property around 300k. If i rent out that home rental income enough for pay capital& interest. If i want to buy another property, is it for borrowing power calculation is it total income alone
Used or bank use only % of my current income?
Hi Sue,
Thanks for your comment and I hope you are doing well. To answer your question about rental income being considered for borrowing power, if the property has tenants and regular income the lender will probably take it into consideration when looking at borrowing power, but it’s worth checking with a lender before applying with them. Some lenders may only take 80% of your rental income as part of your borrowing power.
As a friendly reminder carefully review the terms and conditions and the product disclosure statement of the lender before applying. You may also contact your lender of choice should you have any questions about their loan requirements.
Hope this helps and feel free to reach out to us again for further assistance.
Best,
Nikki
hi,im looking for a low deposit home loan asap
Hi Angeles,
Thank you for reaching out to Finder.
If you are looking for low deposit home loan providers, look at the “Max LVR” portion of the comparison table we are on. The higher the Max LVR, the lower your deposit would be. An example is: For a Max LVR of 80%, you provide 20% deposit on it. Hope this helps! If you wish to ask assistance real time, you could chat with us via the chat button on the page.
Cheers,
Reggie
I am 20 yrs old trying to go for my first house I work full time and I don’t have too much saved up yet in my opinion so where do I get started?
Hi Mark,
Thanks for getting in touch with Finder. I hope all is well with you. :)
It’s nice to know that you’re planning to buy your first house at a very young age. As a general rule, you need to save at least 10% of the property value. This can give a 5% buffer (for a maximum 95% LVR loan) to pay costs such as stamp duty and LMI onto the principal of the loan.
Ensure that there is a high likelihood that you’ll qualify for a home loan before you apply. The way the credit system works, each application for credit is recorded against your name. Multiple entries in a short space will more than likely lead to rejection. Other factors that lenders may consider to assess your eligibility are your income, assets, liabilities, employment and credit history.
Moreover, you mentioned that you are a first-time homebuyer. In this case, you may want to read our guide about the First Home Owners Grant.”
Finally, if you want to know more about the things you need in a loan when buying your first home.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
I am 48. Never had a loan for anything as I believe you don’t get unless you have. I am entitled to the first home owners grant. Currently I’m on a sickness benefit but looking for work down the track. I’ve been looking at rentals but if I can buy my own home rather than pay someone elses off I don’t see why not to go for it. Where do I stand ?
Hi Helen,
Thanks for reaching out to us. I hope all is well with you today.
At the moment, we do not have a specific list of home loan lenders that accept sickness benefits as your main source of income. Finding a lender may require you to do some research or you may contact a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options. Once you’ve found a lender who is willing to help, you may proceed with the regular application process. Please note that you will need to provide extra information about your income.
Before applying, please ensure that you meet the eligibility criteria and requirements of the loan option or lender and make sure to read the details, as well as the relevant Product Disclosure Statements / Terms & Conditions of the loan option before making a decision and consider whether the product or option is right for you.
I hope this helps.
Cheers,
Judith
can I obtain a home loan for a farm which is 42 ha which I intend to develop it has a home on it I am looking for 400;000 and I have 170,000
Hi Trent,
Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.
You are on the right page. You may customize, review, and compare the offers available on the table. Once you have selected one, you may proceed by clicking the green “Enquire Now” button.
I hope this helps.
Cheers,
Danielle
Looking at Low Doc Loan max borrowing on my property current value around 1.1 million I am self employed what can you offer Pat
Hi Pat,
Thanks for your question.
You may compare low doc home loans on our website to explore your options. The maximum amount that you can borrow depends on the LVR of the home loan product you are getting.
You may also check with a mortgage broker. A mortgage broker is a professional who compares and helps you apply for home loans on your behalf. A good mortgage broker will give you personalised service all the way through to settlement.
Cheers,
Anndy
If I am eligible to borrow 450k home loan for 30 years, what would be minimum repayment per week?
Hi Jamil,
thanks for the question.
You can find out what your loan repayments would be for different loan rates using our repayment calculator.
I hope this helps,
Marc.
What is the “advertised rate”? And “comparison rate”? And what is the difference?
Hi Degsy,
Thanks for your inquiry.
The advertised rate is a interest rate charged for a home loan, and it’s decided by the lender. It’s used to work out what your loan repayments will be.
The comparison rate is the advertised rate including some of the fees of the home loan (The application fee and any ongoing monthly fees for example), and is accurate for the example of a $150,000 loan over 25 years. By law, comparison rates must be included on all home loan advertisements, as it gives you a way to see what the actual cost of a home loan is because of the inclusion of these fees.
You can find out more about it in our home loan comparison rate guide.
I hope this helps,
Marc
Will I be able to borrow with my Income being from Income protection payments
Hi Tony,
Thanks for your enquiry.
Generally, income protection insurance is designed to help you cover expenses, such as mortgage repayments, in the event that you are unable to work due to injury or illness. Please note that your ability to service a mortgage using this benefit will depend on the type of cover that you have, but most policies provide up to 75% of your monthly income.
As lenders have different eligibility criteria to qualify for home loans, it would be best to contact the lender directly to see whether you can borrow using the benefit from your income payments.
Thanks,
Belinda
What is the difference beteen the interest rate and the comparison rate?
Hi Steve,
Thanks for your enquiry.
The interest rate is the percentage of your home loan that you’ll end up paying in addition to the original loan amount.
Whereas the comparison rate is a percentage amount calculated by adding together the interest rate plus any additional fees or charges associated with the loan. The figure is then converted into a percentage to reflect the true cost of the home loan.
If you compare home loans based on the comparison rate, you’ll get a more accurate idea of the true cost of the loan.
I hope this clarifies things for you.
Thanks,
Belinda