Home Loan Comparison Calculator
Are you weighing up a couple of different home loans and not sure which one will work out better for you? Our loan comparison calculator can help you crunch the numbers.
The calculator can show you what interest you could pay over the life of different loans and what monthly repayments you could face at different interest rates.
Please Note: The calculations do not take into account all fees and charges. The results provided by this calculator are an estimate only, and should not be relied upon for the purpose of making a decision in relation to a loan. Interest rates and other costs can change over time, affecting the total cost of the loan. Consider whether you need financial advice from a qualified adviser.
5-Star Rated Home Loans on Canstar’s database
If you’re in the market for a new home loan, the comparison table below features a snapshot of some of the outstanding value variable rate home loans on our database with links to lenders’ websites, sorted by comparison rate (lowest-highest) and then alphabetically by provider name. Products shown are principal and interest home loans available for a loan amount of $500K in NSW with an LVR of 80% of the property value. Choose between the First Home, Next Home, Investing and Refinance tabs to view results most relevant to you. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan, including the comparison rate, meet your needs and repayment capacity. *Comparison rate based on loan amount of $150,000 and a term of 25 years. Read the Comparison Rate Warning. Use Canstar’s home loan selector to view a wider range of home loan products.
What difference does the interest rate make?
The interest rate on a home loan is often what many people pay the most attention to when comparing different products. It’s likely to be the biggest cost of taking out a loan, albeit not one that’s incurred up-front. Instead, you would make regular interest repayments alongside your regular repayments of the amount you borrowed (the principal). The exception to this is interest-only loans, where you would only pay back the interest for a set period, before the principal repayments would start.
Interest rates can be either variable or fixed. A fixed rate home loan typically involves the borrower and lender ‘locking in’ a particular interest rate for a set period, after which time the rate will become variable at the lender’s discretion for the rest of the loan term. Some loans, known as split loans, have a combination of fixed and variable interest rates.
Interest repayments can add up to a very large amount when spread out over the term of the loan, so taking out a product with a lower interest rate could potentially save you a substantial amount.
For example, Canstar’s loan comparison calculator shows that for a $500,000 loan repaid monthly over 30 years, there would be a $106,931 difference between a loan with an interest rate of 4% p.a. and one at 5% p.a. That’s assuming that all other costs like up-front or regular fees are the same for the two loans, and that both interest rates also stay the same throughout those 30 years.
That said, the interest rate isn’t the only factor that can impact on the cost of a loan. You may also want to consider the fees charged by the lender, and the features on offer – for example, offset accounts which may help you save on interest.
All loans must be advertised with a comparison rate as well as an interest rate. The comparison rate takes into account the interest rate as well as factors like fees charged and is designed to give a more accurate idea of the true cost of a loan.
What difference do upfront fees make?
If you’re taking out a home loan in Australia, it’s almost inevitable that you will incur some up-front costs, whether they’re related to the loan itself or as part of another aspect of the process of buying a property.
Some of the common up-front fees that lenders charge are at loan establishment fee for setting up the loan, and a security fee which some lenders charge in order to add the property you’re buying as security against the loan.
If you’re purchasing a home with a deposit of less than 20% of the property’s value, then you will also likely incur a lender’s mortgage insurance fee which can be a significant amount.
Shopping around for a loan with low or no upfront fees, and saving for a deposit of at least 20%, are two ways you could save a considerable amount of money on your loan. However, don’t forget to also factor in the interest rate charged when doing your sums, as well as the features on offer.
In addition to loan fees, you may also need to factor in other initial costs when you buy a property. These will vary depending on your jurisdiction and the property you’re buying, but could include:
- Stamp/transfer duty
- Building and pest inspection fees
- Land transfer fees
- Solicitor/conveyancing fees
- Moving fees
How do introductory rates work?
Some loans come with an introductory rate, also known as ‘honeymoon rate’. This is usually a promotional interest rate that’s charged for a set period of time at the beginning of the loan term, before the loan reverts to a different, usually higher, rate.
Introductory rates are sometimes used by lenders as an incentive or sales tactic to entice new customers, and while they may save customers in the short term, you should consider taking into account the revert rate and comparison rate too, as honeymoon rates can make some products appear artificially cheaper. It could also be worth factoring in any additional fees or other loan costs that may come with a loan that has an introductory rate.
Consider using our Honeymoon Loan Calculator to get an idea of the cost of a loan based on both the introductory rate and the revert rate that would kick in once the promotional period on a loan has expired.
Home loan calculators to help you work out your financial position
Use Canstar’s home loan calculators when you’re doing your sums about how much you can afford to borrow, what your repayments could be, plus other factors to consider:
- Home Loan Borrowing Power Calculator
- Home Loan Repayments Calculator
- Home Loan Extra Repayments Calculator
- Home Loan Lump Sum Repayment Calculator
- Home Loan Honeymoon Rate Repayment Calculator
- Home Loan Stamp Duty Calculator
- Home Loan Split Calculator
- Home Loan Comparison Calculator