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Current home loan interest rates in Australia
Home loan interest rates in Australia are rising fast. But there's a huge gap between the market average and the lowest rates on offer. Compare current rates from as low as 5.8%.
We put every effort into ensuring information on Finder is accurate. This article was reviewed by John Pidgeon from our Editorial Review Board as part of our fact checking process.
Average Australian interest rates versus the market's lowest rates
Australian interest rates March 2024
Data
Average variable mortgage interest rate
7.26%
Lowest variable rate available on Finder*
5.69%
Average fixed mortgage interest rate
6.66%
Lowest fixed rate available on Finder*
5.48%
*Lowest rates listed above are based on products from lenders with whom Finder has a commercial partnership.
Where does this data come from?
Finder maintains a home loan database that includes thousands of interest rates from lenders big and small. Our data covers the majority of the home loan market.
Our average interest rate figures are updated monthly. To get the average variable rate figure we take the average of all interest rates for loans that:
Are for owner-occupiers
Have principal-and-interest repayments
Have maximum insured LVRs of 80% or higher (available for borrowers with at least 20% deposits)
This ensures our average rates reflect the types of loans that the average borrower would actually need.
If you want the current rates for different home loan types, check out the following pages:
Interest rates affect how much it costs to borrow money (and how much you can earn on money in your savings account).
Various factors combine to determine how high or low interest rates are at any time.
The Reserve Bank of Australia
Australia's Reserve Bank determines certain interest rate settings, including the official cash rate target. This is a benchmark interest rate that effects the cost of borrowing money.
When the cash rate increases, lenders pass on their higher costs to borrowers. When the cash rate falls, lenders drop rates.
The RBA determines the cash rate based on multiple factors.
The economy. If economic growth is slow, lower interest rates can boost the economy by encouraging borrowing and spending. If the economy is booming but policy makers are worried about inflation or debt bubbles, increasing rates can help cool things down.
Inflation. When inflation is high (prices for goods are rising), the Reserve Bank may increase interest rates to decrease the supply of money and drive spending down. This helps curb inflation.
The US Federal Reserve. Large economies like the US have big effects on smaller markets like Australia. If the US Federal Reserve (America's version of the RBA) moves interest rates up or down, Australia is likely to follow to some degree.
Lenders have a lot of flexibility in setting their rates
While the Reserve Bank sets the floor for certain interest rates, banks and lenders have a lot of flexibility to price interest rates themselves. Some lenders may drop rates to entice new customers. Others may feel that they can keep customers while lifting rates.
What's happening with Australian interest rates?
Home loan interest rates began rising rapidly in 2022 when the Reserve Bank of Australia lifted the cash rate 8 times in 8 months. There were 5 rate rises in 2023.
As interest rates rise, home loan repayments increase. And this means shopping around for a lower rate can save you more than ever.
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 2 otherwise identical home loans with principal-and interest-repayments and 30-year loan terms. The only difference is a 50 basis point difference in the rate.
Loan A
Loan B
Interest rate
6.00% p.a.
6.50% p.a.
Loan amount
$500,000
$500,000
Monthly repayment amount
$2,998
$3,161
Total cost of loan
$1,079,191
$1,137,723
Total interest paid
$579,191
$637,723
Saving on cheaper loan
$58,532
N/A
As you can see, the lower interest rate of Loan A results in a saving of more than $58,000 over 30 years.
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Frequently asked questions about home loan interest rates in Australia
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.
When comparing home loans, 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.
Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification.
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my son an Australian citizen would be a first-time buyer in Australia, and we are researching the best time to buy looking at interest rates and property prices etc, he is open to all areas as he is a postman and his job is transferable
Any help will be great.
Unfortunately at Finder, we can’t provide personal guidance around where to buy or market timing. It really depends on each individual’s goals and plans.
Whatever you decide, I do suggest factoring in interest rate rises. Calculate your monthly mortgage repayments with a 3% interest rate. And then see how expensive repayments get with a 5% rate. It’s a good affordability test.
Hi, I have a mortgage of $90,000 remaining could I change to another bank with this amount. I have a variable interest rate and receive a discount of 1.12% my rate being 4.15%. I would like to transfer to a bank with a more competitive rate.
Thank you.
Yes, you can change your mortgage to get better rates by doing a refinance home loan. On the page you’ll find:
a table that lists out the brands offering refinancing
benefits of refinancing
steps on refinancing
average costs
other refinancing FAQs
You can use our comparison table to help you find the lender that suits you.
You can also speak to a mortgage broker. They are the best person to reach out to see your options for refinancing. They can give you a multitude of options according to your situation. In the meantime, to give you an estimate of your monthly repayments, you may use our home loan calculator.
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my son an Australian citizen would be a first-time buyer in Australia, and we are researching the best time to buy looking at interest rates and property prices etc, he is open to all areas as he is a postman and his job is transferable
Any help will be great.
thank you
Hello Amanda,
Unfortunately at Finder, we can’t provide personal guidance around where to buy or market timing. It really depends on each individual’s goals and plans.
Whatever you decide, I do suggest factoring in interest rate rises. Calculate your monthly mortgage repayments with a 3% interest rate. And then see how expensive repayments get with a 5% rate. It’s a good affordability test.
Good luck,
Richard
Hi, I have a mortgage of $90,000 remaining could I change to another bank with this amount. I have a variable interest rate and receive a discount of 1.12% my rate being 4.15%. I would like to transfer to a bank with a more competitive rate.
Thank you.
Hi Allan,
Thanks for your inquiry.
Yes, you can change your mortgage to get better rates by doing a refinance home loan. On the page you’ll find:
You can use our comparison table to help you find the lender that suits you.
You can also speak to a mortgage broker. They are the best person to reach out to see your options for refinancing. They can give you a multitude of options according to your situation. In the meantime, to give you an estimate of your monthly repayments, you may use our home loan calculator.
Hope this helps!
Best,
Nikki