The average home loan interest rate

How does the interest rate on your mortgage compare to Australia’s average home loan interest rate?

Choosing a home loan is probably the most important financial decision you will ever make. A home loan will cost you hundreds of thousands of dollars and affect your financial future for years to come, so it’s essential to make sure you get the best deal available.

The interest rate is a crucial factor in determining the true value of a home loan, and finding a lower rate can save you tens of thousands of dollars over the life of the loan. So let’s look at the average home loan interest rate in Australia and how that compares to any loans you may be considering.

Want more Australian home loan statistics? Check out our fact page here

Compare some of today's home loan rates

Rates last updated July 17th, 2018
$
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%
3.59%
$0
$0 p.a.
80%
Get $1,000 cash into a USaver account when you take out a loan of $200,000 or more (new or refinance). Terms and conditions apply. Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
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.
3.69%
4.11%
$0
$395 p.a.
80%
Save on interest with a 100% offset account and save on other ME products with this package loan.
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.
3.52%
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.
3.64%
4.03%
$0
$395 p.a.
80%
New borrowers or refinancers from another lender get a discounted rate with this package loan.
3.75%
3.75%
$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.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
Get a 100% offset account to save on interest charges, and pay no application fee.
3.69%
3.70%
$0
$0 p.a.
90%
Package your loan and get an interest rate discount, a 100% offset account and help from an HSBC relationship manager.
3.54%
3.58%
$0
$0 p.a.
80%
Eligible borrowers can get $900 cashback on this loan with a 100% offset account and a redraw facility.
3.65%
3.66%
$0
$0 p.a.
90%
Competitive interest rate and low fees. Available with a 10% deposit. Partial offset account attached (offset up to $15,000).
3.69%
3.69%
$445
$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.
3.85%
3.85%
$0
$0 p.a.
80%
Pay no application and ongoing fees with Macquarie Bank Basic Home Loan.
3.68%
3.82%
$0
$10 monthly ($120 p.a.)
80%
Let the mortgage experts at Aussie do the hard work for you. Speak to a broker about this competitive home loan and compare many other offers from across the market.
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.
3.65%
3.66%
$0
$0 p.a.
80%
This special rate mortgage has no ongoing fees and offers flexible repayments. Save $595 in establishment fees before 30 September.
3.64%
3.84%
$0
$0 p.a.
70%
Enjoy all the benefits of the Basic Home Loan and take advantage of an offset account.
3.59%
3.74%
$0
$10 monthly ($120 p.a.)
70%
Low-rate loan with 100% offset account for owner occupiers. You need a 30% deposit to get this mortgage.
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.
3.78%
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.
3.59%
4.67%
$0
$395 p.a.
90%
Enjoy a competitive rate with no application fee for this package loan.
3.79%
3.79%
$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.
3.84%
3.87%
$0
$0 p.a.
90%
Save on interest with a free 100% offset account and buy your property with just a 10% deposit.
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.
3.76%
4.15%
$0
$395 p.a.
90%
A high maximum LVR home loan with redraw facility and additional payments. Includes a 100% offset account.
3.89%
3.77%
$0
$0 p.a.
80%
Pay no application or ongoing fee and borrow up to 80% LVR.
3.62%
3.62%
$0
$0 p.a.
95%
A low deposit mortgage with a competitive rate and plenty of flexibility. QLD residents only. Eligible borrowers can get a 15% discount on home and contents insurance for the life of their loan.
3.64%
3.69%
$600
$0 p.a.
80%
A competitive variable rate for borrowers with a 20% deposit or more. Guarantor option available.
3.74%
3.79%
$600
$0 p.a.
80%
A low rate variable home loan offer with no monthly fees or application fee charge.
3.59%
3.59%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a redraw facility and flexible repayment schedule. Get $1,000 cash into a USaver account when you take out a loan of $200,000 or more (new or refinance). Terms and conditions apply.
4.04%
4.07%
$0
$0 p.a.
90%
For a limited time, pay no application or settlement fees. You can also take advantage of a free redraw facility.
3.70%
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.
3.72%
4.11%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
3.97%
3.99%
$0
$0 p.a.
80%
Package your owner occupied loan with investment loan and receive a discounted investment rate. 100% offset account included.
3.75%
4.00%
$0
$248 p.a.
70%
Get a sharp rate and a 100% offset account. Borrowers must have a 30% deposit.
3.62%
4.49%
$0
$0 p.a.
80%
Get a competitive rate and avoid ongoing fees. This loan is only available to current and former employees of eligible Queensland government organisations.
3.59%
3.99%
$600
$395 p.a.
95%
Get interest rate discounts and waived fees on this package loan with a 100% offset account.
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.
3.99%
3.74%
$0
$0 p.a.
90%
2 years fixed interest terms with no application fee or ongoing fees, loans.com.au has won a range of awards for their home loans.
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.
3.99%
5.17%
$600
$0 p.a.
90%
Competitive rates for fixed for 3 years with redraw facility.
3.79%
3.83%
$600
$0 p.a.
80%
A low interest rate loan with limited fees and a redraw facility. Principal and interest repayments only.
4.09%
4.12%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
3.99%
3.99%
$0
$0 p.a.
70%
Investors with a 30% deposit can get this low rate loan to fund their property portfolio.
3.90%
4.78%
$600
$0 p.a.
95%
A competitive fixed rate mortgage with split facilities and extra repayments. You can get this loan with a 5% deposit.
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.
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.
3.59%
4.14%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
3.89%
4.87%
$595
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying and pay no application or ongoing fees.
4.05%
4.10%
$445
$0 p.a.
90%
Buy a home with just a 10% deposit with this variable rate loan. Face-to-face consultations available for NSW and ACT customers.
4.14%
4.14%
$0
$0 p.a.
80%
Investors get a 100% offset account and pay no application or ongoing fees on this loan from an innovative online lender.
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.
3.99%
4.62%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.74%
4.01%
$395
$0 p.a.
80%
A competitive 3 year fixed rate with no ongoing bank fees.
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.
4.19%
4.19%
$0
$0 p.a.
90%
Access to redraw facility and offset account without the annual fee.
3.99%
3.99%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required. 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.
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.
3.99%
3.99%
$0
$0 p.a.
80%
Get special offers on a Visa Platinum card, transaction accounts and insurance with this package loan.
3.79%
4.18%
$0
$375 p.a.
90%
A high maximum LVR and 100% offset account are available with this loan.

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Why do I need to know the average home loan interest rate?

When you borrow money to finance the purchase of a home, banks don’t just hand the funds out for free. Not only will you have to pay back the money you borrow, but you’ll also have to repay the interest that accumulates on that principal amount.

Your lender sets the rate at which interest accumulates on the money you borrow. There can be substantial interest rate differences from one lender to the next, and they have a huge impact on the overall cost of your mortgage.

When comparing home loans, it is often quite difficult to wrap your head around all the facts and figures available to determine which loan offers the best value for money. But checking out the current average home loan interest rate on this page gives you a quick and easy way to compare rates for different mortgages on the market at any given time.

This information can then be used to help you make an informed decision about which home loan is right for you.

How much difference does a higher or lower interest rate make?

Even a slight variation in interest rates can make thousands of dollars of difference over the life of a home loan. For example, let’s consider a $500,000 home loan with principal and interest repayments and a loan term of 25 years. The table below shows the overall cost of this loan with an interest rate of 3.75% p.a. and 4.00% p.a.

Loan ALoan B
Interest rate4.00% p.a.3.75% p.a.
Loan amount$500,000$500,000
Monthly repayment amount$2,639.18$2,570.66
Total cost of loan$791,755.26$771,196.80
Total interest paid$291,755.26$271,196.80

As you can see, the 0.25% p.a. lower interest rate of Loan B results in a saving of more than $20,000 across the 25-year loan term. That clearly demonstrates just how important it is to get a competitive interest rate. Use our home loan repayment calculator to see how a higher or lower interest rate could affect your mortgage repayments.

What other factors affect home loan affordability?

While interest rates are undoubtedly important, they’re not the only factor that determines whether a home loan meets your needs. Other issues to consider include:

  • Fees. These include application fees, loan establishment fees, legal fees, ongoing fees, additional repayment fees and more.
  • Loan to valuation ratio (LVR). This refers to the amount of money you are allowed to borrow relative to the value of the property you want to buy. It has a direct affect on the amount of deposit you will need to have saved in order to qualify for a loan.
  • Repayment flexibility. As well as choosing a repayment schedule to suit your budget, some loans also allow you to make additional repayments at any time so you can pay your loan off quicker.
  • Loan features. Some features you might like to take advantage of include a redraw facility to access your extra repayments, and an offset account to reduce the amount of interest you need to pay.

Compare your mortgage interest rate with the average home loan interest rate in Australia to determine whether your home loan offers value for money. Just remember to consider a host of other features and factors before choosing the loan that’s right for you.

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Important Information*
loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64%p.a.
comp rate of 3.66%p.a.

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. Get $1,000 cash into a USaver account when you take out a loan of $200,000 or more (new or refinance). Terms and conditions apply.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤90% ($150K+ Owner Occupier)

Loans over $150k get a discount off an already low fixed rate. Available for NSW, Qld and ACT residents only.

IMB Budget Home Loan - LVR <= 90% (Owner Occupier, P&I)

Buy a home with just a 10% deposit with this variable rate loan. Face-to-face consultations available for NSW and ACT customers.

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