Home Loans

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Canstar is now Australia’s biggest financial comparison site^,
comparing more brands than any other.

 

Mitch Watson
Group Manager - Research & Rating
Brisbane, Australia

“With over a 2.65% difference between the lowest & highest home loan comparison rates on our database, it could be a good time to review your loan.

Latest in Home Loans

Compare Home Loans

Canstar assesses over 4,000 home loans from more than 100 providers across Australia, to help you compare home loans and find an outstanding value loan to suit your needs.

home loans

What is a home loan or mortgage?

A home loan or mortgage is a loan from a bank or other financial institution to buy, build, refinance, or renovate a residential property. In Australia, a home loan typically has a 25-year or 30-year loan term, is repaid via regular payments and accrues interest. Interest is what a lender charges to let you borrow money.

There are many different types of home loans on the market. How these loans are structured is typically based on:

  • The purpose of the loan, such as a purchase by a first home buyer, other owner-occupier or property investor; to construct a property; or to refinance or restructure an existing loan.
  • The interest rate type. Typically this is either variable, meaning the lender can change it up or down at any time), fixed rate (meaning the rate is ‘locked in’ for a set period before reverting to variable), or ‘split’ rate (where some of the loan is fixed and the rest is variable).

A home loan is secured against your property, so if you are unable to continue paying the loan, the lender may ultimately be able to evict you from the property and sell it to settle the debt.

Learn more about how home loans work here.

How to compare home loans

Canstar currently compares more than 4,000 home loans, to provide home buyers with certainty and confidence when they compare mortgages and interest rates.

Use our home loan comparison selector by inputting the information that applies to you, and then hitting the “compare” button. You will be presented with a list of products, which will typically be ordered according to their Canstar Star Rating, or applicable interest rate. You can change the order of the listed results by adjusting the settings at the top of the list, and change what is in the list via the filter function.   

Learn more about Canstar

When it comes to comparing home loans, the interest rate is an important consideration and can make a significant difference in the total cost of any loan. However, there are a number of other factors you may also want to consider. These factors include:

When you compare home loans with Canstar, you can easily view the advertised interest rate and comparison rate, as well as fees and features attached to each product. The product’s Star Rating is also displayed, to help you find a home loan that has been deemed to offer outstanding value by Canstar Research.

Comparing interest rates

Home loan interest rates can vary significantly between home loan providers. Because home loans are a long-term debt, even small differences in interest rates can make a big difference to the total amount you will pay on your loan over its lifetime.

Use our Mortgage Calculator to help you work out what your interest rate could cost you, both in monthly repayments and over the life of the loan.

A home loan comparison rate is designed to give borrowers a more accurate indication of the true cost of a loan and incorporates factors including the interest rate as well as most fees and charges.

Comparing features

You can use our website to compare the features of the home loans available for your situation. 

Learn more about the features you may want to consider in our Canstar Home Loans Star Ratings report. A summary of the features that Canstar researches and rates in an outstanding value home loan are contained in the Methodology attached to the report.

Compare Home Loans

 


Author: Nina Tovey

nina.tovey

Nina is the Editor-in-Chief of Canstar, Australia’s biggest financial comparison site. She is responsible for leading the editorial strategy, and works with a team of journalists and SEO specialists to drive traffic through delivering compelling and insightful content to consumers looking for support with their finances. You can follow her on Instagram or Twitter.


 

Please note that these are a general explanation of the meaning of terms used in relation to home loans or mortgages.

The wording of loan terms and conditions may use different phrases or terms, and you should read the terms and conditions of the relevant loan to understand the features and cost of that loan. You cannot rely on these terms to the part of any loan you may purchase.

Refer to the product disclosure statement (PDS) and Canstar’s Financial Services and Credit Guide (FSCG).

What is a comparison rate?

A comparison rate is an interest rate figure that represents the total annual cost of the loan, including the annual interest rate, monthly repayments, and most ongoing and upfront fees and charges. On the Canstar website, all comparison rates for home loans are based on a $150,000 loan over 25 years. Learn about comparison rates.

What is home loan pre-approval?

Home loan pre-approval is an initial approval process where the bank provides a borrower with an estimate of how much they could borrow, based on information they have provided to the bank. Find out how to get home loan pre-approval.

What is Lenders Mortgage Insurance (LMI)?

Lenders Mortgage Insurance is a type of insurance that the loaning institution takes out in case of default from the borrower, which the borrower must pay for. Usually applies to home loans with a higher LVR (more than 80%). Learn about LMI and how to avoid it.

What is a credit rating (credit score)?

A credit rating is an assessment of the credit-worthiness of individual borrowers, based on their borrowing and repayment history (credit report). Lenders consider your credit rating when deciding whether or not to give you a loan, how much to loan you, and what interest rate you will pay. Check your credit rating.

What is LVR (Loan to Value Ratio)?

The Loan to Value Ratio (LVR) is the maximum proportion of the value of your home that can be loaned out to you. For example, a bank may approve your loan for 80% of the property value, in which you must pay the remaining 20% as your deposit. Find out how LVR affects your interest rate and LMI.

What is equity?

Equity is the residual claim to ownership that the purchaser holds. For example, when an owner has purchased a house with a loan for $100,000 and has made repayments of $40,000, the owner has equity on the house of $60,000.

What is the First Home Owner Grant (FHOG)?

The First Home Owner Grant (FHOG) is a government grant given to first home buyers. Learn what first home owner grants are available in your state or territory.

What is the First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme (FHLDS) is a form of government assistance aimed at helping eligible home buyers get a leg up onto the property ladder for the first time.

The scheme allows some low- and middle-income earners to secure a partially government-guaranteed loan with a deposit of as little as 5% of a property’s value, without needing to pay for Lender’s Mortgage Insurance (LMI).

Applications opened on 1 January, 2020 at Commonwealth Bank and National Australia Bank, while non-major lenders start accepting applications from 1 February.

What is a variable rate?

A variable home loan interest rate fluctuates according to the official cash rate set by the Reserve Bank of Australia. The rate can go up or down over time, varying your repayments. These loans allow for more flexibility and options. Learn about variable rate home loans.

What is a fixed rate?

A fixed rate home loan allows a borrower to lock in an interest rate for a particular period of time, typically from 1 year up to 5 years. The interest rate that the borrow pays will remain the same for that amount of time, regardless of changes in the RBA cash rate. Learn about fixed rate home loans.

What is a home loan guarantor?

If someone “goes guarantor” on your loan, it means that they are promising (“guaranteeing”) that they will be liable for the loan if repayments are not made. The guarantor also means they must be able to demonstrate their own capacity to repay your loan. Learn about guarantors on home loans.

How does negative gearing work?

Negative gearing is when the income from an investment property is not enough to pay the interest on the home loan for that property, negative gearing is currently available as a tax deduction against that income. Learn about negative gearing.

What is a mortgage offset account?

A mortgage offset account is a savings account linked to your loan to offset the interest charged on your loan. The money (or credit) in your account is offset daily against your loan balance, which reduces the daily mortgage interest charges. Learn about offset accounts.

What is a redraw facility?

A home loan redraw facility is a feature that enables the borrower to withdraw funds they have already paid, usually this is a condition based on if they are far enough ahead on loan payments. This is not available on all loans. Learn the pros and cons of redraw facilities.

Compare Home Loans

Canstar’s^ highest rated Refinancing Home Loans with the Lowest Comparison Rates from referral partners

for an original home loan amount of $350,000 over a 30 year term

See some of the lowest comparison rate, 5-Star rated variable home loan products with principal and interest repayments on Canstar’s^ database. The table below displays a snapshot of some of the products from our referral partners sorted by Star Ratings, then comparison rate (lowest to highest), then by provider name (alphabetically).

Products displayed above that are not “Sponsored” are sorted as referenced in the introductory text and then alphabetically by company. Canstar may receive a fee for referral of leads from these products. See How We Get Paid for further information.

Canstar is an information provider and in giving you product information Canstar is not making any suggestion or recommendation about a particular product. If you decide to apply for a home loan, you will deal directly with a financial institution not with Canstar. Rates and product information should be confirmed with the relevant financial institution. Home Loans in the table include only products that are available for somebody borrowing 80% of the total loan amount. For product information, read our detailed disclosure, important notes and additional information. *Read the comparison rate warning. The results do not include all providers and may not compare all the features available to you.