Some of the best home loans on Canstar's database in 2020

Deputy Editor · 17 January 2020

If you’re looking to kick a significant property goal this year or want to shave money off one of your biggest household costs, finding a home loan that suits your needs and offers value compared to other products out there mightn’t be a bad place to start.

Canstar has identified some of the top-rated loans on its database with links to lenders’ websites, available to owner occupiers, based on our most recent Home Loan Star Ratings. The Ratings assessed more than 3,000 products based on factors including the interest rate and fees charged by the lender, as well as the features the loans offer.

Some of the best variable rate home loans on Canstar’s database

If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $350K in NSW with an LVR of 80% of the property value and that offer an offset account. 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 meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products.

*Comparison rate based on loan amount of $150,000 and a term of 25 years. Read the Comparison Rate Warning

What makes for an outstanding value home loan?

At a time when home loan interest rates are at an all time low, you might think the rate you’re charged is the only number to think about. But fees and features can play a big part in determining the cost of a loan, the value it offers and ultimately whether it’s likely to be suitable for your situation as a borrower.

Some of the more common fees to watch out for include:

  • Application/establishment fees
  • Ongoing fees
  • Break/exit fees
  • Redraw fees (if you withdraw any extra repayments you have made)

Some of the features that lenders may offer and that can add value to borrowers include:

  • The ability to get loan pre-approval
  • Being able to make additional repayments
  • A redraw facility, so that you can withdraw your extra repayments if you need them
  • Offset account to help you save on interest
  • The ability to manage your account across channels such as online banking and a mobile app

If you’d like to find out more about the factors Canstar takes into account when assessing home loans, take a look at our most recent Home Loan Star Rating report.

What else do I need to consider when buying a property?

Buying a home can be a bit of a plate-spinning exercise, with lots of different financial considerations and other steps to factor in.

Choosing a suitable loan is generally one of the more important ones, but here are others to consider. For example:

Keep an eye on costs

You’ll need to save and budget for a home loan deposit, but don’t forget about the other costs such as solicitor fees, inspection fees, moving costs, and the big one: stamp duty, unless of course you’re eligible for a stamp duty exemption, which brings us on to…

Watch out for support available to buyers

Some buyers, particularly those buying their first home, may be eligible for incentives and grants that are on offer from state and federal governments. These include: first home owner grants, stamp duty concessions and exemptions, and the First Home Loan Deposit Scheme. Bear in mind that most incentives and support comes with strict eligibility criteria and may exclude certain home and borrower types, homes over a certain value, or borrowers who earn above a set income threshold.

Main image source: bmphotographer (Shutterstock)

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