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Advertised Rate

2.55%

Fixed - 1 year

Comparison Rate*

3.21%

Company
Adelaide Bank
Repayment

$638

monthly

Features
Redraw facility
Offset Account
Borrow up to 79.9999%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.48

/ 5
Go to site
More details
Advertised Rate

2.84%

Variable

Comparison Rate*

2.46%

Company
Athena Home Loans
Repayment

$710

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.96

/ 5
Go to site
More details
Advertised Rate

3.39%

Variable

Comparison Rate*

3.59%

Company
Pepper
Repayment

$1,484

monthly

Features
Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.03

/ 5
Go to site
More details
Advertised Rate

2.55%

Variable

Comparison Rate*

2.60%

Company
CUA
Repayment

$1,353

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.10

/ 5
Go to site
More details
Advertised Rate

2.94%

Variable

Comparison Rate*

3.34%

Company
Newcastle Permanent
Repayment

$1,413

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.57

/ 5
Go to site
More details
Advertised Rate

2.84%

Variable

Comparison Rate*

2.68%

Company
Athena Home Loans
Repayment

$710

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.96

/ 5
Go to site
More details
Advertised Rate

3.29%

Variable

Comparison Rate*

3.71%

Company
NAB
Repayment

$823

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.46

/ 5
Go to site
More details
Product
Advertised Rate

2.79%

Fixed - 3 years

Comparison Rate*

4.46%

Company
CUA
Repayment

$698

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.71

/ 5
Go to site
More details

Learn more about home loans

Obtaining cheap mortgages is a lot easier than it used to be due to the many financial comparison websites that give you the opportunity to sift through a wide range of mortgage options. Gone are the days when you had to traipse around banks and building societies to look for a deal that would best suit your circumstances. Today, there is a lot of advice online when it comes to financial matters, and when you've weighed up some comparisons, you can move ahead with confidence. 

What are cheap mortgages?

These are financial products that are aimed at providing you with the best mortgage deal available. Many companies will offer cheap mortgages and will be hoping to win your business, but you need to fully understand what your options are. A mortgage is a loan from a company to enable you to perhaps buy your first home or upgrade to a larger property. It can also provide financial backing for an investment in a property that you won't live in but will rent out. There are a number of types of mortgage, and it's as well to understand how they differ before making a decision.

  • Variable interest rate: this type of mortgage means that payments fluctuate, usually in line with what official interest rates for the country are set at. They are popular with owner occupiers, who have a little leeway if interest rates go up and will benefit if lower interest rates are passed on by their lender.

  • Fixed interest rate: the interest rate you pay is fixed for an agreed period of time between you and the lender. It could be for two or three years or up to ten years. It gives you the security that you know exactly how much you will be paying each month for that given period of time. You won't benefit from a reduction in interest rates, but you will be protected if they rise. 

  • Split interest rate: you can choose, if your lender agrees, a split rate whereby part of your loan is fixed and part is at a variable rate.

How do cheap mortgages compare with other similar products?

When you are researching cheap mortgages, you should bear in mind that there are often terms and conditions you need to check. You may discover what you think is the best deal in terms of interest rates, but you need to understand the small print. Some lenders may not permit you to rent out rooms if it is your primary residence, or allow you to rent the whole property until you have made repayments over an agreed period.

What risks and rewards are there with cheap mortgages?

If you keep up your repayments, then you will be the proud owner of a property that is likely to have increased in value at the end of the mortgage term. Your home is at risk if you don't keep up the regular repayments, so bear that in mind when you enter into a loan agreement.

Frequently asked questions

What is the best interest rate for a mortgage?

The fastest way to find out what the lowest interest rates on the market are is to use a comparison website.

While a low interest rate is highly preferable, it is not the only factor that will determine whether a particular loan is right for you.

Loans with low interest rates can often include hidden catches, such as high fees or a period of low rates which jumps up after the introductory period has ended.

To work out the best value for money, have a look at a loan’s comparison rate and read the fine print to get across all the fees and charges that you could be theoretically charged over the life of the loan.

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

How long should I have my mortgage for?

The standard length of a mortgage is between 25-30 years however they can be as long as 40 years and as few as one. There is a benefit to having a shorter mortgage as the faster you pay off the amount you owe, the less you’ll pay your bank in interest.

Of course, shorter mortgages will require higher monthly payments so plug the numbers into a mortgage calculator to find out how many years you can potentially shave off your budget.

For example monthly repayments on a $500,000 over 25 years with an interest rate of 5% are $2923. On the same loan with the same interest rate over 30 years repayments would be $2684 a month. At first blush, the 30 year mortgage sounds great with significantly lower monthly repayments but remember, stretching your loan out by an extra five years will see you hand over $89,396 in interest repayments to your bank.

How do I calculate monthly mortgage repayments?

Work out your mortgage repayments using a home loan calculator that takes into account your deposit size, property value and interest rate. This is divided by the loan term you choose (for example, there are 360 months in a 30-year mortgage) to determine the monthly repayments over this time frame.

Over the course of your loan, your monthly repayment amount will be affected by changes to your interest rate, plus any circumstances where you opt to pay interest-only for a period of time, instead of principal and interest.

Does the Rate Guarantee apply to discounted interest rate offers, such as honeymoon rates?

No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Rate Guarantee.

However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.

Interest Rate

Your current home loan interest rate. To accurately calculate how much you could save, an accurate interest figure is required. If you are not certain, check your bank statement or log into your mortgage account.

What is an interest-only loan? (include how do I work out interest-only loan repayments)

An ‘interest-only’ loan is a loan where the borrower is only required to pay back the interest on the loan. Typically, banks will only let lenders do this for a fixed period of time – often five years – however some lenders will be happy to extend this.

Interest-only loans are popular with investors who aren’t keen on putting a lot of capital into their investment property. It is also a handy feature for people who need to reduce their mortgage repayments for a short period of time while they are travelling overseas, or taking time off to look after a new family member, for example.

While moving on to interest-only will make your monthly repayments cheaper, ultimately, you will end up paying your bank thousands of dollars extra in interest to make up for the time where you weren’t paying off the principal.

Who offers 40 year mortgages?

Home loans spanning 40 years are offered by lenders such as BCU, Teacher’s Mutual Bank and Pepper. Even though these loans exist on the market, they are not overwhelmingly popular as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

What is a split home loan?

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

What is an investment loan?

An investment loan is a home loan that is taken out to purchase a property purely for investment purposes. This means that the purchaser will not be living in the property but will instead rent it out or simply retain it for purposes of capital growth.

How does RateCity make money?

For details on how RateCity makes money, please see here.

What is a line of credit?

A line of credit, also known as a home equity loan, is a type of mortgage that allows you to borrow money using the equity in your property.

Equity is the value of your property, less any outstanding debt against it. For example, if you have a $500,000 property and a $300,000 mortgage against the property, then you have $200,000 equity. This is the portion of the property that you actually own.

This type of loan is a flexible mortgage that allows you to draw on funds when you need them, similar to a credit card.

What is the Rate Guarantee?

The Rate Guarantee is RateCity putting its money where its mouth is. We believe that too many Australians are paying too much for their home loans. We’re so confident we can help Aussies save money, if we can’t beat your current rate, we’ll give you a $100 gift card.*

There are three reasons it pays to check your rate with the RateCity Rate Guarantee:

  • You can find out how much you could save on your home loan by switching to a loan with a lower interest rate
  • If we can’t beat your current rate, you can claim a $100 gift card with our Rate Guarantee*
  • Everyone who checks their home loan will be entered in the draw for a chance to win $1 million!^

How can I use the $100 gift card?

Your $100 gift card works just like a digital VISA debit card and can be used anywhere that these cards are accepted until its balance runs out.

What is the amortisation period?

Popularly known as the loan term, the amortisation period is the time over which the borrower must pay back both the loan’s principal and interest. It is usually determined during the application approval process.

What factors does Real Time Ratings consider?

Real Time RatingsTM uses a range of information to provide personalised results:

  • Your loan amount
  • Your borrowing status (whether you are an owner-occupier or an investor)
  • Your loan-to-value ratio (LVR)
  • Your personal preferences (such as whether you want an offset account or to be able to make extra repayments)
  • Product information (such as a loan’s interest rate, fees and LVR requirements)
  • Market changes (such as when new loans come on to the market)

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you. 

What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

Can I check my rates more than once? Can I go back to view loans from a different device (e.g. my phone) or at another time without having to enter details in again?

You can only check your rates once. However we will send you, via email, the link to the result page so that you may return to it.