Home loan FAQs

A comparison rate combines a loan’s interest rate with most of its upfront and ongoing fees, so you can see the true cost in a single percentage. Two loans with the same interest rate can have very different comparison rates once fees are included.

In Australia, lenders must show the comparison rate next to any advertised interest rate. It’s calculated on a $150,000 loan over 25 years, so it may not exactly match your own loan, and it doesn’t include costs such as break fees or late payment fees.

We check lender rates regularly, and the date the rates were last checked is shown below the comparison table. Lenders can change their rates at any time, so always confirm the current rate with the lender before you apply.

No to both. We’re a comparison and information site. We don’t lend money or arrange loans, and everything on this site is general information that doesn’t take your personal situation into account.

When you’re ready to apply, you deal with the lender directly or through a licensed mortgage broker. For advice about your own circumstances, speak with a licensed broker or financial adviser.

The Reserve Bank of Australia sets the cash rate, which influences how much it costs banks to borrow money. When the cash rate goes up or down, lenders usually adjust their variable home loan rates soon after, although they don’t have to pass on the full change.

Fixed rates don’t change during the fixed period, but new fixed rates tend to move ahead of expected cash rate changes. The RBA meets eight times a year, and you can follow its recent decisions on our homepage rate tracker.

A fixed rate locks in your repayments for a set period, usually one to five years, which makes budgeting easier. The trade-off is less flexibility: extra repayments are often limited, and you may pay break costs if you refinance or sell during the fixed period.

A variable rate can rise or fall at any time, but it usually comes with features such as unlimited extra repayments, redraw and offset accounts. Some borrowers choose a split loan, with part fixed and part variable, to get some of both.

LVR stands for loan-to-value ratio. It’s the size of your loan compared with the value of the property. For example, borrowing $400,000 to buy a $500,000 home gives you an LVR of 80%.

A lower LVR means less risk for the lender, so many lenders offer their lowest rates to borrowers with an LVR of 60% or 70%. That’s why our comparison table shows the maximum LVR for each loan.

Lenders mortgage insurance protects the lender, not you, if you can’t repay your loan. It usually applies when your deposit is less than 20% of the property value, or an LVR above 80%, and it can add thousands of dollars to the cost of buying.

You can often add LMI to your loan rather than paying it upfront. Government schemes such as the Home Guarantee Scheme can help eligible buyers purchase with a smaller deposit without paying LMI.

An offset account is a transaction account linked to your home loan. The balance is subtracted from your loan when interest is calculated, so $20,000 in offset on a $500,000 loan means you only pay interest on $480,000.

Redraw lets you take back extra repayments you’ve already made on the loan. Both reduce the interest you pay, but an offset account keeps your money separate and easier to access, while redraw can come with limits or fees on withdrawals.

We use the loan amount and term you enter with each loan’s interest rate to estimate the monthly principal and interest repayment. For interest-only loans, the estimate shows the interest-only repayment.

The figures don’t include fees, and they assume the rate stays the same for the whole loan. Fixed rates change to a different rate when the fixed period ends, so treat the estimates as a guide only.

It’s worth comparing your loan if your rate is well above the lowest rates on the market, your fixed period is ending, or you want features your current loan doesn’t have, such as an offset account. Even a small rate difference can save thousands over the life of a loan.

Before you switch, check the costs: discharge fees from your current lender, application fees from the new lender, break costs if you’re on a fixed rate, and LMI if your LVR is above 80%. Many borrowers also ask their current lender for a better rate first.