The home loan features most worth paying for are a 100% offset account, free extra repayments and, if you need it, the option to split between fixed and variable. Portability and rate locks are useful in specific situations, while cashbacks, credit cards and add-ons bundled into packages rarely justify a higher rate or fee. Compare features against the comparison rate, because a loan with a low headline rate can cost more once fees and missing features are counted.
Features compared
| Feature | What it does | Worth paying for if |
|---|---|---|
| 100% offset account | Savings in a linked account reduce the interest charged | You’ll keep a meaningful balance, roughly $6,000 or more on average |
| Free extra repayments | Pay more than the minimum without penalty | You want to pay the loan off faster (standard on most variable loans) |
| Redraw | Take back extra repayments you’ve made | You want access to extra repayments but don’t need an offset |
| Split loan | Fix part of the loan and keep part variable | You want certainty on some repayments and flexibility on the rest |
| Rate lock | Holds a fixed rate from application to settlement | Rates are rising and settlement is weeks or months away |
| Portability | Move the loan to a new property when you sell and buy | You expect to move and want to avoid refinancing costs |
| Package | One annual fee covers rate discounts, offsets and fee waivers | You’ll use the offset or have several loans |
| Interest-only option | Pay interest only for a set period | You’re an investor who needs cash flow |
| Cashback | A one-off payment for switching | The rate is also competitive over the years you’ll keep the loan |
Interest rate and comparison rate
Start with the rate, because it’s the biggest cost. As at 2 October 2026, the average owner-occupier variable rate was 6.63% and the lowest advertised was around 5.79%. Then check the comparison rate, which adds most upfront and ongoing fees into a single annual figure for a standard loan. See comparison rates vs interest rates.
Fixed or variable
Variable loans move with the market and usually include unlimited extra repayments and a full offset. Fixed loans give certainty but usually limit extra repayments and can charge break costs if you repay early. With fixed rates sitting slightly below variable in October 2026, many borrowers are fixing part of the loan and keeping the rest variable with an offset.
Offset or redraw
Both reduce interest. An offset keeps your savings in a separate account you can use freely; redraw holds extra repayments inside the loan and may have minimum amounts, fees or limits, and lenders can restrict it. If you might ever rent out the property, an offset is usually better for tax.
Extra repayments
Most variable loans allow unlimited extra repayments for free. Fixed loans often cap them, commonly at $10,000 to $30,000 a year, with break costs above that. If paying down the loan quickly matters to you, check the cap before you fix.
Portability and rate locks
- Portability lets you keep your loan, and its rate, when you sell one property and buy another. It avoids discharge and application fees, and avoids break costs on a fixed loan. Timing rules apply, usually requiring both settlements on the same day or close together.
- A rate lock fixes your rate when you apply rather than at settlement. Lenders charge a fee, often a few hundred dollars or a percentage of the loan. In a rising market, it can be worth it if settlement is months away.
Packages, cashbacks and green discounts
Packages bundle an offset, rate discount and fee waivers for one annual fee, often a few hundred dollars. They pay off if you use the offset or hold several loans. Cashbacks can be tempting, but compare the rate over several years; see home loan cashback offers. Some lenders also discount rates for energy-efficient homes; see green home loans.
When you’ve shortlisted features, use our guide on how to compare home loans to weigh the total cost.
Frequently asked questions
Which home loan features are worth paying for?
For most borrowers, a 100% offset account and free extra repayments deliver the biggest savings. A split loan is worth having if you want some certainty. Paying a package fee makes sense if you’ll keep enough in the offset to save more interest than the fee, usually an average balance of around $6,000 at current rates.
What is loan portability?
Portability lets you transfer your existing loan to a new property when you sell and buy, keeping the same rate and terms. It avoids the cost of discharging one loan and applying for another, and avoids break costs on a fixed loan. Lenders set timing rules and may charge a small fee.
Can I lock in a fixed rate before settlement?
Yes, most lenders offer a rate lock for a fee, holding the fixed rate from application until settlement, usually for up to 90 days. Without a lock, you get the fixed rate on offer on the day the loan settles, which may be higher if rates rise in the meantime.
Sources
- Canstar, Average home loan interest rates, as at 2 October 2026
- ASIC Moneysmart, Comparison rate
- ASIC Moneysmart, Choosing a home loan
General information only. It does not consider your objectives, financial situation or needs and is not credit, tax or financial advice.