Compare home loan rates

Steady monthly inflation figures indicate that the RBA may keep the cash rate on hold at its next meeting, scheduled for 18-19 March on the new 2024 timeline. This could in turn signal cautious optimism as opposed to immediate fear of an economic downturn. 

If the RBA keeps rates untouched, borrowers hoping for a rate cut may need to do the work themselves. This could be as simple as calling your bank to ask for a discount, or comparing options to switch and save. 

Keep in mind that the rate you’re offered will depend on a wide range of factors, with the size of your deposit or home equity being a significant one. 

Low home loan rates for March

Some of the lowest rates on RateCity at the time of writing include: 

• 5.48% p.a Fixed - 3 years (Comparison Rate* 6.24% p.a) Australian Mutual Bank Fixed Rate Home Loan 3 Years
• 5.64% p.a Fixed - 5 years (Comparison Rate* 6.44% p.a) RACQ Bank Fixed Rate Home Loan - Owner Occupied (QLD only)
• 5.69% p.a Variable (Comparison Rate* 6.11% p.a) LCU Savvy First Home Buyer Loan
• 5.69% p.a Fixed - 4 years (Comparison Rate* 6.31% p.a) HSBC Package Fixed Rate Home Loan (Principal and Interest) 4 Years (LVR < 60%)
• 5.69% p.a Fixed - 3 years (Comparison Rate* 6.34% p.a) SWSCU Optimum Fixed Rate Investment Loan

This is the comparison rate published by the lender and is on a per annum basis. The comparison rate is calculated for a secured loan for an amount of $150,000 over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. 

Updated by Mark Bristow on 1 March 2024. 

A home loan is a significant sum of money that you borrow from a bank or other lender to purchase property. When you take out a home loan, you use your home as security, giving the lender the right to take the property back if you fail to repay the loan. In legal terms, this is known as "mortgaging" your home, which is why a home loan is sometimes called a mortgage. 

Repaying a home loan involves making regular instalments, which include both the borrowed amount and an extra charge known as "interest." 

The interest you're charged on each mortgage repayment is based on your remaining loan amount, also known as your loan principal. The rate at which interest is charged on your home loan principal is expressed as a percentage. Your home loan’s interest rate is effectively the cost of “buying” the money you use to purchase property. 

As home loans are secured by the value of the property, most lenders consider them less risky than most personal loans or business loans, so their interest rates are usually much lower. You can use a mortgage repayment calculator to determine how much your monthly repayments are likely to be for various loan sizes at different rates of interest. 

In addition to the interest rate, lenders commonly impose various fees, such as application fees, annual fees, late payment fees, extra repayment fees, etc. These fees can significantly contribute to the overall cost of your loan. 

If you choose a loan with additional features, like a redraw facility or an offset account, you may need to pay an additional fee or a higher interest rate. However, these features could be highly beneficial for some borrowers in effectively managing their home loan. 

It's crucial to weigh the costs and benefits before committing to a specific loan. While a higher fee or interest rate may seem daunting, the added features could potentially save you money in the long run or offer valuable flexibility. Carefully assess your financial situation and goals to make an informed decision that aligns with your needs. 

There is no one-size-fits-all best home loan type. Selecting the right home loan involves considering the diverse range of options available, as there is no universally perfect choice. There are different types of home loans on the market tailored to the varying needs of borrowers. These include construction loans, bridging loans, low doc loans designed for the self-employed, reverse mortgages, and more. 

By understanding your requirements from a home loan, you can choose the ideal mortgage type for your unique situation and needs. For instance, if you plan to construct or substantially renovate a house, a construction loan may be better suited for your situation. 

Spend some time to understand the various home loan options on the market to choose a mortgage that best suits your needs. Consider speaking to a mortgage broker to learn more about your options. 

What type of interest rate works best for you?

When you take out a home loan, one your first choices will be deciding between a fixed or variable interest rate. But what does that mean? 

• Fixed rate home loans
• Variable rate home loans
• Split rate home loans

Are you buying your first home or an investment property?

You can purchase a property to make it your home or use it as a rental to supplement your income. Depending on how you intend to use the property, you can choose between an owner-occupied or investor loan, both of which come with different sets of features and rates. 

• Owner-occupied home loans
• Investment property home loans
• Interest-only investment home loans

Planning to construct or substantially renovate a house? 

Building your dream home or undertaking significant renovations requires not just vision, but also specialised financing that caters to the unique needs of construction projects. 

• Owner builder home loans
• Construction loans

Looking for a better rate or features on an existing mortgage? 

If your current mortgage no longer fits your financial situation or the market has evolved, refinancing can offer a pathway to better interest rates, lower monthly payments, or improved loan features. 

• Refinance home loans
• Home loans with redraw facility

Other home loan types 

The mortgage market serves a broad array of borrowers, including self-employed individuals and those seeking unique financing options like bridging or SMSF loans. Familiarising yourself with the variety of home loan types can help you find the most suitable option for your specific needs. 

• Self-employed home loans
• Bridging home loans
• SMSF home loans
• Low deposit home loans
• Guarantor home loans

You can use RateCity’s rate tables to compare apples with apples. Using filters, you can enter details of how much you’d like to borrow, your preferred loan term and any other features and benefits you’re interested in. This can help narrow your home loan shortlist down to only those best-suited to your needs. 

You can also look at the Real Time Ratings™ on RateCity to get a better idea of each loan’s overall value. These star ratings are calculated as you use the site to help ensure they’re up to date, and combine the cost and flexibility of each mortgage deal. 

Choosing a home loan isn't just about picking the lowest interest rate. Remember, the cheapest rate doesn't always mean you're getting the best deal for your situation. There’s no single best home loan that will work for every borrower, but reviewing multiple home loan options and comparing them can increase your chances of finding a loan that’s the best fit for your situation and budget. 

Here are some things to consider when comparing home loans: 

Interest Rates 

Choosing the right interest rate type for your home loan is a crucial decision that can affect your financial flexibility and overall loan costs. 

• Fixed vs. Variable: Decide whether you want the predictability of fixed interest rates or the potential savings of variable rates. 
• Comparison Rate: Look beyond the headline rate to the comparison rate, which includes the interest rate plus most fees and charges, giving a truer cost of the loan. But remember, this rate is based on a set loan amount and term, so it might not fit your exact situation perfectly. To really understand what you'll pay, calculate your monthly loan repayments and add any fees to see the full picture. 

Fees 

Buying a property often means paying for more than just the house itself. While your deposit plus your loan amount should cover the property’s purchase price, you’ll also need to have enough money saved to cover other upfront costs, such as: 

• Establishment fees
• Lenders mortgage insurance (LMI)
• Stamp duty
• Conveyancing or valuation fees

These costs can vary, and you can use online calculators to estimate how much extra you may need to budget for. 

Loan Features 

Some of the common and useful home loan features include: 

Extra repayments

Additional repayments can help to lower your outstanding mortgage principal, potentially lowering your interest charges and helping you pay off your property sooner. 

Redraw facility 

Access the extra repayments you’ve previously made onto your home loan, putting the cash back in your bank account when you need it. A redraw facility can be useful if you are paying for renovations, paying for a family holiday or just have an emergency payment you need to make. 

Home loan portability 

Portability is a home loan feature that allows you to transfer your existing home loan to a new property without the need to refinance. So, if you plan to change homes, you can keep your current loan without going through all the paperwork and processes of getting a new one. 

Mortgage holiday 

Some lenders allow you to pause repayments on your home loan for a limited time period in the event of financial hardship. This is also known as a mortgage repayment holiday or a mortgage freeze. 

Offset account 

A 100% offset account is a linked transaction account to your mortgage, in which funds deposited in the account are included when calculating your home loan’s interest charges. The funds help to ‘offset’ or reduce the amount of interest you pay.

Both the state and federal governments offer a variety of grants and incentives to help home buyers, especially first home buyers. Most state and territory governments offer a First Home Owners Grant (FHOG) or similar incentives (such as discounted or waived stamp duty) to assist borrowers buying their first property. 

The federal government’s Home Guarantee Scheme (HGS), previously known as the First Home Loan Deposit Scheme (FHLDS) is a program that allows borrowers to apply for a mortgage with a deposit of just 5% and pay no LMI, as the government will step in to guarantee the remainder of the deposit. 

Keep in mind that there are a limited number of places available in this program each financial year, and only a limited number of lenders are participating in the program. Also, both the borrower(s) and the property being bought will need to satisfy a number of terms and conditions to be eligible. 

Another government program that may be useful to home buyers is the First Home Super Saver (FHSS) scheme. This allows borrowers to make extra contributions into their superannuation fund, where you can’t easily access your cash for everyday spending. These contributions can later be withdrawn from your super fund to help cover the cost of your deposit – up to $15,000 of voluntary contributions per financial year, up to a total of $30,000 in contributions across all years. 

Your home loan is one of the largest and most significant financial commitments of your life. Just as you wouldn't buy the first car you saw at a dealership, you should never apply for the first home loan you see. 

It’s important to choose the home loan that best suits your lifestyle, financial needs and personal goals. Finding the best home loan involves more than just hunting for the lowest interest rates. Comparing loans and looking at the rates, fees, features and benefits of home loans from a variety of different banks and other mortgage lenders can help you work out which mortgage offers are the best for you, and not just the cheapest. 

Even after successfully taking out a home loan, it’s often a good idea to conduct home loan comparisons at regular intervals, to make sure that your mortgage still suits your needs. If you find another home loan with a lower interest rate or features and benefits that better suit your changing circumstances, you may have the option to refinance. 

How to buy your first home

How to get a home loan pre-approval

Loan to value ratio: Explained

Lenders Mortgage Insurance (LMI)

What does the government offer for home buyers?

Using Super for a house deposit

First Home Owner Grant (FHOG)

Home Guarantee Scheme (HGS) eligibility

RateCity’s articles and guides can help you understand the steps involved in getting a home loan, whether you’re buying your first home or looking for a better deal on your current loan.

First-time home buyers

Government assistance for home buyers