Compare, calculate and save on your home loan.

Compare home loan interest rates

Finding your dream property can be difficult, but choosing a lender can be even harder. If you are struggling to choose the right type of home loan or select a lender, Comparehomeloansaustralia.com.au is here to help. We have provided you with all the educational resources and comparison tables needed to make an informed decision and choose a home loan that is right for you.

Types of home loans

Variable rate home loan

A variable rate home loan is a type of loan that has a varying interest rate, meaning the interest rate may increase and decrease during the loan term. Due to the fluctuating interest rate, loan repayments will vary over the loan term, meaning you will be able to take advantage of decreased interest rates (smaller repayments), but still be required to pay when interest rates increase (larger repayments).

Fixed rate home loan

A fixed rate home loan has a fixed rate that will remain the same during an agreed length of time - usually between 1 to 5 years. After the agreed fixed period, you can choose to re-fix your loan (however, will be charged at the new fixed rate), or switch to a variable interest rate. The main attraction of fixed rate loans is the certainty of repayments staying the same, giving you comfort of knowing exactly how much your loan repayments will cost.

Interest-only home loan

An interest-only home loan allows you to pay only the interest for an agreed period of time. After the interest-only period, the loan will revert to a principal and interest (P&I) home loan, where you will be required to repay the principal of the loan and the interest. Interest-only loans are suitable for buyers or investors who would like the extra cash flow for renovations or to spend elsewhere during the start of the loan.

Split home loan

Split home loans are a combination of variable and fixed rate loans, where you can ‘split’ your loan into multiple accounts to get the benefits of each type. With split loans, you will have the flexibility to design your home loan to benefit you. For example, you can split your loan into two accounts with a 70:30 split, where 70% of your loan has variable repayments, and 30% has fixed. Splitting your loan will give you the benefits of a variable loan (e.g. offset sub-accounts, make additional repayments or redraw) and the certainty of fixed rate loans.

Principal and interest (P&I) home loan

Principal and interest (P&I) home loan repayments include paying off the principal amount (the amount borrowed) and the interest rate. This is the most common type of home loan because P&I loans steadily reduce the principal owed, which results in paying off your loan and owning your home sooner.

Offset sub-account

An offset sub-account is a transactional account linked to your home loan to help you pay off your home loan sooner and reduce the amount of interest you pay. You can deposit money into your offset sub-account, such as your income, and the money is ‘offset’ against the home loan balance, so you will only pay interest on the difference between the loan amount and the amount in your offset sub-account. A key feature of using an offset sub-account is being able to maximise your savings to pay off your loan sooner, and if needed, you can also redraw money.

Bridging home loan

A bridging home loan is a short term loan, typically up to 12 months, that is used to help you purchase your next home before your existing property is sold. Applying for a bridging loan could help you buy your dream home, rather than just missing out due to timing. Bridging home loans are a great option if you cannot afford two home loans, or if you do not have the borrowing capacity for two long term mortgages.

Self Managed Super Fund (SMSF) home loan

A Self Managed Super Fund (SMSF) loan can be used when purchasing an investment property, where the profits made on the property, whether it is rental or capital gains, will be put back into the super fund, setting you up for retirement. Usually, you cannot live in a property purchased with a SMSF loan.

Low doc home loan

A low doc home loan is a home loan option that requires different income verification documents than full documentation home loans. Low doc loans are a suitable option if you are unable to provide up to date tax returns or recent pay slips, or if you are self-employed.

Low deposit home loan

Low deposit home loans are loans given to borrowers who need to borrow more than 80% of the property value. Depending on the lender, you may be accepted for a home loan with as little as a 5% deposit, which is a popular option amongst first home buyers. If you purchase a home with less than a 20% deposit, you will need to pay Lender’s Mortgage Insurance (LMI), which is an insurance to protect the lender in the case you cannot make mortgage repayments.

Reverse mortgages

A reverse mortgage is a loan option that allows you to borrow money using equity in your home as security. If you are over 60, a reverse mortgage is a good option to allow you to continue living in your current home while having money to pay for living costs. Reverse mortgages work where the lender pays the borrower, and in return, the lender will receive equity in your property. Once you sell your home, or you pass away, you will repay the loan in full including interest and fees.

What home loan is best for me?

Owner occupied home loan

An owner occupied home loan is for buyers who want to build a home, purchase an existing property or renovate with the intent to live in the home.

Investment home loan

Investment home loans are for buyers who purchase a property with the plan to rent it to tenants. Investment loan interest rates are generally higher than owner occupied loan rates because investors are considered as higher risk than buyers who plan to live in their property.

Construction home loan

A construction home loan is for buyers who are building a home or undertaking major construction to an existing property. If you are conducting major structural renovations to your current property, you may be eligible for a construction loan. Construction loans are structured differently to other loans, where the lender will gradually release your loan in stages to your builder, rather than loaning the full amount at the beginning of the term. This is especially helpful to save money in interest and keep your repayments low while construction takes place, as you generally cannot live in the property until construction is complete.

Renovation home loan

If you’re renovating your home, such as redoing the bathroom or adding an extension, you may be eligible for a renovation home loan to finance your home improvements. Renovation loans are similar to construction loans, however lenders often lend less money for a renovation loan.

First home buyers

If you’re buying your first home, you may be eligible for the First Home Owners Grant (FHOG). The FHOG is a government scheme to help people purchase their first home. It is a one-off payment, which is dependant on your state, but could be up to or more than $20,000. To qualify for the FHOG, you must be:
- 18 years old or over
- An Australian citizen or permanent resident
- A first-time recipient of the grant, and first time residential property owner
- Able to move into your new home within one year, and reside in the property for minimum of six months
There are other requirements of the FHOG, which vary between states, but generally only newly built properties are accepted, with a cap on the property purchase price.

What to look for when comparing home loans

There are many different lenders that offer home loan products, including banks (such as the Big 4) and non-banks, of which may be online or have physical branches. You should consider how you like to communicate with your lender (online, over the phone or in person) when choosing a home loan.

Advertised rate

The advertised rate is the interest rate charged by a lender on a particular home loan. Interest rates vary between lenders, so it is important to carefully compare home loan interest rates when choosing a lender.

Introductory offers

Introductory offers are ‘specials’ on home loan products, such as a reduced rate for the first two years of a home loan, which you may be eligible for when you sign up with a new lender.

Comparison rate

The comparison rate represents the actual cost of the home loan, and includes the interest rate and fees.

Application fees

Some lenders charge application fees, as well as other initial costs including valuation fees or title registration fees.

Ongoing fees

Some lenders charge ongoing fees for their home loan products on top of regular repayments, which may include a monthly or annual fee.

Exit fees

There are different types of exit fees, including discharge fees, early termination fees and break costs. You may be charged an exit fee if you pay off your mortgage before the agreed term ends, or if you refinance with another lender.

Loan term

The loan term is the agreed time in which the principal (loan balance) needs to be paid off, which is commonly 30 years. Over the agreed term, the borrower will make regular repayments to pay down the principal and interest accrued on the loan.

Loan features

Depending on the type of loan and the lender, you may receive loan features such as an offset sub-account, redraw facility, or a line of credit.

Cash back offers

Cash back offers are sign up incentives, where you may receive ‘cash back’ when you sign up for a loan with a new lender. For example, this may include a $2000 refinance cash back when you refinance your home loan. While these offers are appealing, it may not be worth signing up for a new loan solely based on a cash back offer.

Who can help me get a home loan?

Big 4

The Big 4 refer to the leading banks in Australia, which are Westpac, Commonwealth Bank (or CommBank), NAB and ANZ. As well as being banks where you can open transaction and saving accounts, they are also the leading lenders in the country and provide various types of home loans, car loans and personal loans.

Other banks

Outside the Big 4, there are many other Australian banks that offer the same services. These include ING, Suncorp Bank, BOQ, Macquarie Bank and many more. All Australian banks are registered financial institutions that are licensed to receive deposits and administer loans.

Credit unions

Credit unions can administer loans and receive deposits, however unlike banks, credit unions are membership based financial institutions, meaning if you become a member you also become a part-owner. Like a bank, credit unions are recognised as Authorised Deposit-taking Institutions (ADIs), and are credible lenders for your home loan.

Non-Bank lenders

Non-bank lenders are financial institutions who provide home loans and car loans, however they are not banks. Because they aren’t deposit taking institutions, their loans are funded by wholesale funds. Non-bank lenders are a trustworthy alternative to banks, making up a significant part of the home loan market in Australia.

Digital banks

A digital bank is a bank (such as the Big 4) that utilises digital banking methods to offer their services and products. This may include offering an online banking app for customers, as well as having physical branches.

Neo banks

Neo banks are similar to digital banks, however they operate solely online and do not have physical branches. They are licensed banks and use apps where customers can complete online transactions, deposit money and access other services offered by the neo bank.

Online lenders

Online lenders are non-bank lenders that operate solely online, similar to a neo bank. Online lenders typically provide loans, including home, car and personal, and use mobile apps for their customers to review their loans.

Fintechs

Fintechs, short for 'financial technology’ are innovative financial institutions and services offering new methods to manage your finances online. They operate online, and are very similar to online lenders.

Brokers

Mortgage brokers are mortgage advisors that borrowers can hire to help find the right home loan product. They act as the ‘middle man’ and search and compare home loans on your behalf, before presenting you with home loan options they believe are suitable for you. Broker’s can also help you understand all aspects of a loan and provide guidance when selecting a loan.

The Australian Securities and Investments Commission (ASIC) regulates all banks and financial service providers in Australia (including mortgage brokers). ASIC requires all financial service providers (including banks, non-banks and fintechs) to be licensed and meet their banking standards. The Australian Prudential Regulation Authority (APRA) supervises banking and other financial institutions (including insurance and superannuation) and ensures operation under reasonable circumstances to protect the customers.

What to look for when choosing a home loan lender

Products

Lenders often offer multiple loan products that help people in different situations, with different loan needs. For example, some lenders offer green home loans, where you can receive a discounted rate if your home qualifies as a ‘green’ home. There are more home loans available than owner-occupied or investor, so comparing lenders is important to find a product that is right for you.

Customer service

Customer service can be one of the key factors when choosing a lender. It is important to consider your preferred mode of communication, as some lenders will have physical branches while others operate 100% online. Reading reviews can also be a great way to learn about a lender’s customer service standards.

Application process and timeframes

Lenders often have different application methods, from a quick 5 minute online application to filling out documents at a physical branch. Consider which method is suitable for you, as well as the approval timeframe that comes with online applications versus paper.

Post settlement process

The post settlement process is what happens after your property purchase has settled. Typically, your lender will require you to pay for land transfer or stamp duty before the property is transferred into your name and start taking mortgage repayments, however this process may vary between lenders.

Other product features

Depending on the lender, you may be able to access additional features such as make additional repayments or redraw, add an offset sub-account or switch from a variable to fixed rate loan.

Questions to ask your lender

Some important questions to ask your lender before you apply for a loan include:
- How much can I borrow?
- Am I eligible for a discount?
- What upfront fees do I need to pay?
- What is the repayment frequency?
- What documents are needed to apply?
- What minimum deposit is required?
- What features are available?

Home loan application and approval process

Qualification criteria

Each lender will have their own set of home loan qualification criteria that you will need to meet to be approved for a loan, which may include your deposit amount, the borrowing amount (or LVR), your age, debt, credit history and income.

What you will be required to provide to the lender

Borrowers are often required to provide lenders with certain documents that prove their financial capability to borrow money for a mortgage. This may included recent tax returns, income statements, bank statements (including savings and genuine savings), and proof of identity documents.

Factors that may impact lending

There are some factors that may prevent you from being approved for a home loan. These factors may very between lenders, however generally include the location of the property you want to purchase, the type of property, your deposit amount and LVR, as well as your borrowing capacity.

Tools and calculators

How much can I borrow?

Before you purchase a property, you should know your borrowing capacity to help you know what you can afford. To find how much you can borrow, you can use the loancalculatortaustralia.com.au Borrowing Power Calculator.

Home Loan Borrowing Power Calculator

What will my home loan repayments be?

Calculating your home loan repayments may help you find what you can afford to pay on a weekly, fortnightly or monthly basis. To find out your potential mortgage repayments, use the loancalculatoraustralia.com.au Home Loan Calculator.

Home Loan Repayments Calculator

How much will Lender’s Mortgage Insurance (LMI) cost?

If you pay less than a 20% deposit when you purchase a property, you will be required to pay LMI. Use the loancalculatoraustralia.com.au LMI Calculator to see how much you may need to pay.

Lender’s Mortgage Insurance Calculator

How much will stamp duty cost?

When you purchase a property, you will likely be required to pay stamp duty. Find out how much stamp duty you will be required to pay with the loancalculatoraustralia.com.au Stamp Duty Calculator.

Stamp Duty Calculator