Low interest rate home loans: How to save thousands on your mortgage

Getting a lower interest rate home loan could save you tens of thousands over the life of your mortgage.

Finding a home loan with a lower interest rate is often the top priority for home buyers. If you're looking for loans with competitive rates you can compare them right now in the table below. Or you can read on to learn the ins and outs of low rate loans.

Compare low rate loans right now

Rates last updated April 19th, 2018
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Loan purpose
Offset account
Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.59%
3.60%
$0
$0 p.a.
90%
Borrow up to 90% of the value of your property and pay no ongoing fees with this loan from a leading international bank.
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.
3.69%
3.69%
$0
$0 p.a.
90%
Get a special discount for a limited time when you open an IMB Transaction Account. Face-to-face consultations available in NSW and ACT.
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.
3.49%
3.49%
$0
$0 p.a.
90%
Get a competitive variable rate with low fees. Add a 100% offset account for $10 a month. Available with a 10% deposit.
3.64%
3.66%
$0
$0 p.a.
80%
Pay no ongoing fees and enjoy a flexible repayment schedule, including the ability to make unlimited additional repayments without penalty.
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.
3.52%
3.53%
$0
$0 p.a.
80%
Go from application to approval in as little as 20 minutes with a variable rate loan from this innovative online lender. Add a 100% offset account for $10 a month.
3.65%
3.66%
$0
$0 p.a.
90%
Offset up to $50,000 of the combined balances of your CUA Everyday Accounts and save on interest.
3.64%
3.67%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
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. Refinance to a UBank loan and you could get $1,000 in your USaver account (offer conditions apply).
3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $1,200 cashback on this loan with a 100% offset account and a redraw facility.
3.49%
3.52%
$500
$0 p.a.
95%
A loan that combines a competitive rate with a 100% offset account.
3.77%
3.81%
$200
$0 p.a.
95%
A simplified mortgage with a low interest rate and a redraw facility.
3.72%
3.74%
$0
$0 p.a.
80%
Save on interest by taking advantage of a 100% offset account along with no ongoing fees or application fees.
3.59%
3.99%
$0
$395 p.a.
95%
Get interest rate discounts and waived fees on this package loan with a 100% offset account.
3.74%
3.74%
$0
$0 p.a.
90%
New customers can get a discounted variable rate and a fee-free redraw facility. NSW, QLD and ACT residents only.
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.
3.69%
4.06%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
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.
3.62%
3.62%
$0
$0 p.a.
95%
Free home and contents insurance for 1 year. Terms and conditions apply. QLD residents only.
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.
3.70%
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.
3.99%
4.99%
$600
$0 p.a.
95%
Get a 100% offset account and the option to make extra repayments with this fixed rate loan.
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.
3.94%
3.57%
$0
$0 p.a.
80%
Apply online for this fixed rate, low-fee loan with redraw facilities and an optional offset account.
3.59%
3.99%
$0
$395 p.a.
90%
A high maximum LVR home loan with redraw facility and additional payments.
3.59%
4.14%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
3.88%
4.89%
$0
$395 p.a.
95%
Low deposit home loan. Enjoy flexible repayment options while paying limited fees.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
4.11%
3.83%
$0
$0 p.a.
80%
Enjoy a fast application process and flexible repayment options with this fixed rate investment loan.
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.
3.78%
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.
3.65%
4.84%
$0
$395 p.a.
90%
Pay no application fee for this package loan, and get access to a redraw facility. Face-to-face consultations available for NSW and ACT customers.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.89%
3.92%
$0
$0 p.a.
80%
A low-fee line of credit loan from an online lender. Unlock the equity in your home and make interest-only repayments with a competitive rate.
3.97%
3.97%
$0
$0 p.a.
90%
A variable rate loan with a 100% offset account. Available with a 10% deposit.Face-to-face consultations available for NSW and ACT customers.
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.
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.
3.69%
3.71%
$0
$0 p.a.
80%
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
3.64%
3.67%
$0
$0 p.a.
80%
A mortgage with a competitive variable rate, limited fees and plenty of flexibility.
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.
4.09%
3.79%
$0
$0 p.a.
70%
A competitive 3-year fixed rate loan with a high max insured LVR.
3.85%
4.82%
$600
$35 monthly ($420 p.a.)
90%
Make up to $10,000 in extra repayments per year and take advantage of a flexible repayment schedule.
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.
3.96%
3.98%
$350
$0 p.a.
90%
For a limited time, pay no application or settlement fees. You can also take advantage of a free redraw facility.
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.
3.64%
3.65%
$0
$0 p.a.
95%
Family pledge option available. Get a special discount off Bank of Melbourne's basic variable rate.
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.
3.79%
3.80%
$0
$0 p.a.
70%
Keep your LVR at 70% or below and enjoy a special discounted rate. Also, pay no application or ongoing fees.
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.
3.87%
3.87%
$0
$10 monthly ($120 p.a.)
90%
Get Virgin Velocity Points at settlement, monthly and every three years, plus the option to make up to $10,000 a year in extra repayments.
3.99%
4.03%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and pay no application or ongoing fees.
3.89%
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.
3.68%
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.
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.

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*While the loans featured on this table are competitive products they don't represent a complete selection of the cheapest loans on the market.

Everything you need to know about low rate mortgages

Low interest rate home loans often prioritise a rock bottom rate over features. These loans are often simple, straightforward products with a focus on delivering the cheapest mortgage possible. They are sometimes offered by banks without an extensive branch network, or non-bank lenders without branches, who can pass on their savings to borrowers.

If you’re considering a low interest rate home loan, there are a few factors to take into account.

Should you choose a low interest rate home loan?

Low interest home loans can save you a significant amount of money over the term of your mortgage. But the decision of whether or not to choose a low interest rate home loan comes down to your personal goals.

It’s important to remember that low rate loans can often offer these rates because they eschew some of the features and flexibility common to other loans. This isn’t necessarily a bad thing, however. If all you’re looking for is a low monthly repayment, a basic low interest rate home loan could be the perfect fit.

A home loan might also have a low rate because it’s offered by a lender without an extensive branch network. This means you’ll rely on phone or internet banking to manage your home loan. If you’re happy to interact with your lender this way rather than face-to-face in a branch, a low rate home loan could be a good option.

How much difference does a low interest rate make?

When you’re comparing low interest rate home loans, the rates on offer may appear fairly similar. But it’s important to remember that what appears to be a small difference in rate could make a massive difference over the life of your mortgage.

For example, a home loan with a rate of 3.99% might not look that different than a home loan with a rate of 3.89%. But over the course of 30 years, the difference becomes clear.

Let’s assume you took out a $750,000 home loan with the aforementioned 3.99% rate. Your monthly repayments would be $3,576.29, and the total cost of the loan over 30 years would be $1,287,465.20.

Now, a rate just 10 basis points lower would see your monthly repayments reduced to $3,533.22. That might not seem like much, but over the life of the loan, you’d pay a total of $1,271,957.81. That’s a savings of $15,507.39.

If just 0.10% can make such a significant difference, you can imagine the savings you could see from a low rate home loan compared to a more expensive, complex home loan product.

Comparing low interest rate home loansBalance scales

If your sole concern is a low interest rate, comparing home loans is a fairly straightforward process. However, you’ll still have to think about a few details.

Low variable rates versus low fixed rates

One of the major decisions you’ll have to make is whether to fix your interest rate or choose a variable rate home loan.

The benefit of choosing a low fixed rate is that it will provide you certainty in your repayments. Fixed rate home loans won’t change for the duration of the fixed rate term you choose, which is generally from 1 to 5 years. This means you’ll know what your repayment is every month.

The downside of choosing a fixed rate is that you won’t benefit from any rate cuts. Fixed rate home loans also often lack the flexibility of variable rate home loans. They often either don’t allow extra repayments, or only allow a set amount of extra repayments. And, if you choose to break the fixed rate term by refinancing, you could face thousands of dollars in fixed rate break costs.

Low variable rate home loans, by contrast, give you the option to refinance without penalty. They also generally offer unlimited additional repayments without penalty, allowing you to get ahead on your mortgage. Variable rate home loans also often come with some of the helpful features we’ll explore below.

The downside, however, is that a variable interest rate means your rate could change at any time. This is great when rates are heading down, but if rates rise you’ll find your repayments getting more expensive.

It’s important to weigh up your budget, your lifestyle and your goals when deciding between a fixed or variable interest rate.

Low interest home loan features

A home loan's value isn't just reflected in its interest rate. There are also a host of features that can add value to a home loan and help it work for you.

Offset accounts, for instance, allow you to pay off your home loan quicker and save some serious money on interest payments. An offset account is a transaction account linked to your home loan. When your lender calculates interest on your home loan, they'll offset the amount by the total amount of the funds in the account. For instance, if you have a $500,000 home loan with $50,000 in your offset account, you'll only be charged interest on $450,000.

Find a home loan with an offset account

Redraw facilities can also be handy. A redraw facility allows you to access any additional funds that you've paid towards your home loan. You can withdraw the money for any purpose you choose, though some home loans do have a minimum redraw amount.

A split facility allows you to split your home loan into multiple accounts, taking advantage of the features from several different home loan products. For example, you could split your account into fixed and variable rate portions so that a portion of your home loan gives you the certainty of a fixed rate while another portion offers the flexibility of a variable rate.

When you're choosing a home loan, you should think about what features would suit your lifestyle and financial goals. You also need to pay attention to any fees that are charged. Some home loan features carry associated ongoing fees. This doesn't mean a home loan product is poor value. It simply means you have to weigh the cost of the features against the likelihood that you'll benefit from them.

What to avoid in a low interest rate home loanHazard sign

Low interest rate home loans are often discounts lenders offer on their existing products. They can sometimes be offered as a special promotion to woo borrowers. These discounts can appear to be great, but you have to look a little closer to be certain.

Lenders will often offer what’s known as an introductory variable rate, or a honeymoon rate. This is typically a set discount off the standard variable rate for a predetermined period of time, usually one to two years. At the end of the introductory rate period, the home loan will often revert back to either the lender’s standard variable rate or an ongoing discounted variable rate.

These loans look very attractive, but it’s important to pay attention to how much you’ll pay in the long run. Have a look at the rate your home loan will revert to at the end of the introductory period. If it’s not competitive with other variable rates on offer, the home loan may not be as good a deal as advertised.

You can get an idea of the true value of a home loan by looking at the comparison rate. The comparison rate takes into account both the home loan’s interest rate and its associated fees. In the case of introductory rate home loans, it will also factor in the rate that the product will revert to at the end of the introductory period. By looking at this rate, you can get a clearer picture of how competitive the product is.

Find the low interest mortgage for youMagnifying glass

Now that you know some of the features and factors to take into consideration, you should be able to make a more informed decision about whether a low interest rate home loan is right for you.

When comparing low interest home loans, remember to take into account the features and flexibility you think you’ll need. And don’t forget to look closely at the loan’s fees to make sure it’s actually delivering good value for money.

A low interest rate home loan might not have some of the fancy features of other mortgage products. But by keeping your rate low, you could stand to save hundreds of thousands over the life of your home loan.

Not what you're looking for? Compare a wide range of home loans here

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comp rate of 3.66%p.a.

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Go from application to approval in as little as 20 minutes with a variable rate loan from this innovative online lender. Add a 100% offset account for $10 a month.

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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).

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