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“With over a 3.10% difference between the lowest & highest home loan comparison rates on our database, it could be a good time to review your loan.”
Canstar assesses over 3,000 mortgages from more than 80 providers across Australia, to help you compare home loans and find an outstanding value loan to suit your needs.
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 products on the market and many factors to consider when deciding on the best mortgage for your situation. How these loans are structured is typically based on:
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.
Canstar currently compares more than 3,000 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. To help you make a decision on what is the best mortgage for your needs, you can change the order of the results by adjusting the settings at the top of the list, and change what is in the list via the filter function.
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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.
Interest rates can vary significantly between home loan providers. Home loans are a long-term debt and even small differences in interest rates can make a big difference to the total amount you will pay on your loan over its lifetime. So, combining the best mortgage rate you can find with low fees and quality features can be important.
Use our Home Loan 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.
You might be tempted to simply shop around the best mortgage rates, but when selecting a loan, it’s important to factor in features such as offset accounts and redraw facilities. 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.
If you’re buying a new home or refinancing, you may be tempted to sign up for the cheapest home loan you can find. It’s worth keeping in mind that going with the lowest interest rate won’t necessarily mean you’re getting the cheapest home loan deal in the long run. Up-front and ongoing fees can cancel out some of the money you’d save in interest, while the features you get with the loan may boost the value you’re getting overall. For example, a home loan with a slightly higher interest rate but which allows you to make extra repayments and offset interest, might better suit the needs of some homeowners and help them get ahead faster than the ‘cheapest’ home loan rate would.
As Canstar’s Editor-in-Chief, Nina heads up a team of talented SEO experts and journalists committed to helping empower consumers to take greater control of their finances. Previously Nina founded her own agency where she provided content and communications support to clients around Australia for eight years. She also spent four years as the PR Manager for American Express Australia, and has worked at a Brisbane communications agency where she supported dozens of clients, including Sunsuper and Suncorp.
Nina has ghostwritten dozens of opinion pieces for publications including The Australian and has been interviewed on finance topics by the Herald Sun and the Sydney Morning Herald. When she’s not dreaming up ways to put a fresh spin on finance, she’s taking her own advice by trying to pay her house off as quickly as possible and raising two money-savvy kids.
Nina has a Bachelor of Journalism and a Bachelor of Arts with a double major in English Literature from the University of Queensland. She’s also an experienced presenter, and has hosted numerous events and YouTube series.
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 be part of any loan you may purchase.
Refer to the product disclosure statement (PDS) and Canstar’s Financial Services and Credit Guide (FSCG).
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.
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.
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.
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. Learn more about how to check your credit rating.
The loan to value ratio (LVR) is the amount you are borrowing under your mortgage as a proportion of the lender’s valuation of the property you’re buying. For example, a bank may approve your loan for 80% of the property value – an LVR of 80% – in which case you would need to pay the remaining 20% as your deposit. Generally a lender’s best mortgage rates are reserved for borrowers with a low LVR.
Equity is the difference between the value of your property and the outstanding balance of the loan that was used to fund it. For example, when an owner has purchased a house with a loan for $400,000 and has paid the loan down by $100,000, the owner has equity in the property of $100,000.
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.
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 up to 10,000 low- and middle-income earners a year 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).
The first round of the scheme opened on 1 January, 2020 and has now concluded. The second round of applications opened on 1 July, 2020.
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.
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.
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.
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.
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.
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.
Canstar’s Home Loan Calculators:
Below are some popular home loan providers or view more here: