| 5.59 | % p.a. |
| 5.50 | % p.a. |
| 5.89 | % p.a. |
| 5.95 | % p.a. |
| 5.89 | % p.a. |
| 5.80 | % p.a. |
The best home loan looks a little different for every borrower, but it always comes with a low rate, features you need and as few fees as possible.
Exclusively for refinancers, the Unloan home loan offers one of the most competitive rates on the market and a built-in discount over the life of the loan.
This variable rate loan is available with a 10% deposit. It also lets you earn Qantas Points, which is a nice bonus.
What we like about this home loan
Every month, we examine the home loans currently offered by our commercial partners and select our top picks. While the best home loan looks a little different for every borrower, our methodology considers a set of objective criteria: low interest rates, low fees, required deposit size and loan purpose. These are important factors for every borrower.
However, keep in mind that our top picks may not always be best for you. Based on your situation, you may find certain loan features to be more or less important. You may find a loan with a lower rate or more suitable features somewhere else.
Always compare your options before you apply.
David Smith, chief customer officer of mortgage broking firm Aussie, says when you're deciding which home loan to get, it pays to keep in mind that every borrower is different.
"The first consideration you should make when choosing a home loan is to understand how much you can afford," Smith explains. "That doesn't just mean the maximum amount you can borrow – it also means the maximum you're prepared to pay each month for your loan repayment."
From there, you can plan a budget with your home loan repayments in mind.
"Don't forget, when you purchase a property, there are a number of other upfront costs to cover, including stamp duty – so make sure you factor those extra costs in too," Smith says.
Here are some examples of typical borrowers. While all borrowers are looking for the best home loan to suit them, they all need something a little different.
Our hypothetical first home buyers Sarah and Ted are in their late 20s and are currently renting. They've squirrelled away their money for 4 years and they've saved up $100,000, but because they live in Sydney, this isn't a very big deposit.
The best home loan for this young couple will ideally be one with the following:
With these criteria, Sarah and Ted find a low rate loan with a high LVR. They ask their lender if it accepts guarantors, which it does. Sarah's parents guarantee 15%, so they only need a 5% deposit and they can avoid paying lenders mortgage insurance. The loan they choose does come with a hefty application fee, but they decide it's worth paying because everything else about the loan is perfect for them.
In our hypothetical example, Margaret is currently paying off her home. She wants to buy a unit as an investment. She has $400,000 in equity and will use a line of credit loan to cover her deposit. But she'll need an investment loan to buy the unit. She is less concerned with fast capital growth and more concerned with long-term income from rent.
The best loan for Margaret will be one with the following:
Margaret talks to a mortgage broker who helps her organise the line of credit loan and an investment loan.
David is paying off a $1 million mortgage with a 30-year loan term. He has been repaying the loan for 10 years. David hadn't looked at his interest rate in a while and was shocked to learn that the rate is above 5.00% – when he sees advertisements for other banks and lenders that offer extra features and lower rates.
David wants to refinance to a loan that has the following:
David finds a low-fee variable rate home loan that has a 100% offset account. While his previous rate was above 5.00%, his new rate is 4.60%. He's now paying less interest each month.
There are 3 things every borrower needs to look at when hunting for the perfect home loan: rates, fees and features.
The interest rate determines your borrowing costs, and the lower the rate, the less interest you pay each month.
Let's say your loan amount is $500,000. You choose a variable rate with a 30-year loan term and principal-and-interest repayments (this means you repay the loan amount plus interest at the same time).
The best home loan will always have a lower interest rate because it lowers your monthly loan repayments:
| Interest rate | Monthly repayment |
|---|---|
| 4.50% | $2,534 |
| 4.75% | $2,609 |
| 5.00% | $2,685 |
| 5.25% | $2,762 |
| 5.50% | $2,839 |
| 5.75% | $2,918 |
| 6.00% | $2,998 |
But there's more to a good home loan than the interest rate.
Look for a loan that doesn't charge many fees. While home loan fees seem small in comparison to your repayments, they do add up.
Home loans with added features can offer you more flexibility in how you repay and manage your loan:
We've explained what the average borrower needs to do to find a great home loan. But every borrower's needs are slightly different. The best home loan for each borrower depends on their short- and long-term plans, and the reason they're buying a property in the first place.
Here are some examples of quite specific borrowers and what they'd need to look at to find the ideal home loan.
A property investor with a mortgage on the family homePlenty of investors haven't paid their own home loans off yet. While this means having 2 loans at the same time, it opens up some unique opportunities too.
For this type of borrower, the best approach could be as follows:
This is just one approach for a property investor to take. Another is to look for a home loan bundle or pivot loan that lets you combine your 2 loans, with a higher rate on your investment loan and a lower rate on your home loan. This can be effective for tax purposes.
A cautious home buyer with plenty of extra money in savingsLet's say you have a 20% deposit and you're looking for a home loan. Obviously, the best loan for you has a low interest rate. But let's say you also have a lot of extra money sitting in your bank account earning very little interest.
And let's say you don't have any desire to invest that money. You want to play it safe. In this case, the best home loan really is one with a 100% offset account.
This means you can park your savings in the home loan and still access it whenever you need it. But by saving the money there, you're cutting down the amount of interest your lender charges you.
You've signed a contract to buy and you're running out of timeIf settlement day is fast approaching and you haven't got a home loan approved, the best home loan is the one that a lender will approve quickly.
This could mean a few things. You might abandon the hunt for a better deal and just talk to your own bank. But banks can be slow. You might get faster loan approval with an online lender.
And if you're stuck, a mortgage broker will know which lenders can process your application faster. They can be a real lifesaver when you're running out of time.
If you haven't got the time or energy to do it yourself, talk to a broker. Mortgage brokers are professionals who have access to a panel of lenders. They can find you a product that matches your financial needs and also help with your application.
Talk to a qualified mortgage broker today.
Compare more home loan options here
Samsung's finally unveiled the snazzy new Galaxy Z Fold 5 and Z Flip 5.
If you’ve worked from home at all over the past year you’re entitled to claim some money back as a tax deduction.
Find all the weekly tips from our Dollar Saver newsletter and see how you could save.
Credit card applications are on the rise, but everything else is down as more borrowers miss mortgage repayments.
Get clever with gift cards and reap the (flight) rewards.
Australian households are facing an energy crisis as price hikes coincide with peak winter demand, according to new research by Finder.
The Mattel doll is taking the stock market for a nostalgia-fueled ride.
We've made the decision to remove phone number as a signup and sign-in method for the Finder app.
Emma Sleep has knocked up to 55% off its most popular products with prices starting at just $150.
More and Tangerine launch new international roaming packs with higher data allowances than before.
Sign up for our FREE 8-week course to get on the property ladder.
Get a home loan with a low deposit.
Pay less for your home loan with a super-low interest rate.
Save on your investment loan with these hot offers.
What is the best home loan rate for refinancing a $1.1m loan?
Hi Frederick,
The best home loan interest rate can vary depending on borrower circumstances and what you’re looking for in a home loan.
You can use our comparison tool to help you find the most competitive rates in the market. Consider your borrowing needs and shop around to look for loans with low fees and other loan features you might need.
You can also look into speaking with a mortgage broker to assist you in finding the loan that best fits your interest-rate needs and financial situation.
All the best,
Rebecca
I have a home loan for my current property around 300k. If i rent out that home rental income enough for pay capital& interest. If i want to buy another property, is it for borrowing power calculation is it total income alone
Used or bank use only % of my current income?
Hi Sue,
If the property has tenants and regular income the lender will probably take it into consideration when looking at borrowing power, but it’s worth checking with a lender before applying with them. Some lenders may only take 80% of your rental income as part of your borrowing power.
Best,
Nikki
hi,im looking for a low deposit home loan asap
Hi Angeles,
If you are looking for low deposit home loan providers, look at the “Max LVR” portion of the comparison table we are on. The higher the Max LVR, the lower your deposit would be. An example is: For a Max LVR of 80%, you provide 20% deposit on it. Hope this helps!
Cheers,
Reggie
I am 20 yrs old trying to go for my first house I work full time and I don’t have too much saved up yet in my opinion so where do I get started?
Hi Mark,
As a general rule, you need to save at least 10% of the property value. This can give a 5% buffer (for a maximum 95% LVR loan) to pay costs such as stamp duty and LMI onto the principal of the loan.
Ensure that there is a high likelihood that you’ll qualify for a home loan before you apply. The way the credit system works, each application for credit is recorded against your name. Multiple entries in a short space will more than likely lead to rejection. Other factors that lenders may consider to assess your eligibility are your income, assets, liabilities, employment and credit history.
Moreover, you mentioned that you are a first-time homebuyer. In this case, you may want to read our guide about the First Home Owners Grant.”
Finally, if you want to know more about the things you need in a loan when buying your first home.
Cheers,
Joshua
I am 48. Never had a loan for anything as I believe you don’t get unless you have. I am entitled to the first home owners grant. Currently I’m on a sickness benefit but looking for work down the track. I’ve been looking at rentals but if I can buy my own home rather than pay someone elses off I don’t see why not to go for it. Where do I stand ?
Hi Helen,
Thanks for reaching out to us. I hope all is well with you today.
At the moment, we do not have a specific list of home loan lenders that accept sickness benefits as your main source of income. Finding a lender may require you to do some research or you may contact a mortgage broker who can take your personal circumstance into account and offer you a range of borrowing options. Once you’ve found a lender who is willing to help, you may proceed with the regular application process. Please note that you will need to provide extra information about your income.
Before applying, please ensure that you meet the eligibility criteria and requirements of the loan option or lender and make sure to read the details, as well as the relevant Product Disclosure Statements / Terms & Conditions of the loan option before making a decision and consider whether the product or option is right for you.
I hope this helps.
Cheers,
Judith