Cheap home loans

If you’re looking for a cheap home loan, you can compare options at Canstar, to help you choose the right one for you.The table below shows home loans on our database, sorted by lowest interest rate for a first-time buyer.

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promoted
Fees & charges apply. Australian Credit Licence 237391.
5.54%
Variable
5.57%
$2,852
Principal & Interest
dot
Cashback up to $4,000*
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$0 application fees, monthly or annual fees
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Apply Online
Owner occupied
20% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 237391.
Fees & charges apply. Australian Credit Licence 237391.
promoted
Fees & charges apply. Australian Credit Licence 395219.
5.54%
Variable
5.58%
$2,852
Principal & Interest
dot
Available for purchase or refinance, min 10% deposit
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Fast turnaround times to meet tight settlement timeframes
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No application, ongoing or monthly fees.
Owner occupied
10% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 395219.
Fees & charges apply. Australian Credit Licence 395219.
promoted
Fees & charges apply. Australian Credit Licence 230686. Products issued by ubank, part of NAB.
5.69%
Variable
5.71%
$2,899
Principal & Interest
dot
Easy application. Fast approval. No annual fee.
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Unlimited additional repayments free of charge.
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Products issued by Ubank, part of NAB
Owner occupied
20% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 230686. Products issued by ubank, part of NAB.
Fees & charges apply. Australian Credit Licence 230686. Products issued by ubank, part of NAB.
promoted
Fees & charges apply. Australian Credit Licence 240701.
5.63%
Variable
5.66%
$2,880
Principal & Interest
dot
Award-winning products and service. Fast approvals.
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Discover competitive rates, no ongoing fees & flexible options.
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P&N Bank is your local way home.
Owner occupied
40% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 240701.
Fees & charges apply. Australian Credit Licence 240701.
promoted
Fees & charges apply. Australian Credit Licence 236476.
5.39%
Variable
5.46%
$2,805
Principal & Interest
Owner occupied
40% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 236476. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 236476. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 237476.
5.49%
Variable
5.50%
$2,836
Principal & Interest
Cashback
Owner occupied
20% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 237476. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 237476. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 244533.
5.49%
Variable
5.85%
$2,836
Principal & Interest
Owner occupied
20% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 244533. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 244533. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 214077.
5.49%
Variable
5.52%
$2,836
Principal & Interest
Owner occupied
40% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 214077. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 214077. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 238981.
5.49%
Variable
5.55%
$2,836
Principal & Interest
Owner occupied
40% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 238981. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 238981. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 237856.
5.49%
Variable
5.85%
$2,836
Principal & Interest
Owner occupied
30% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 237856. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 237856. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 395219.
5.49%
Variable
5.95%
$2,836
Principal & Interest
Owner occupied
10% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 395219. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 395219. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
promoted
Fees & charges apply. Australian Credit Licence 496431.
5.54%
Variable
5.55%
$2,852
Principal & Interest
Owner occupied
10% min deposit
Redraw facility
Fees & charges apply. Australian Credit Licence 496431. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 496431. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR

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The initial results in the table above are sorted by Interest rate p.a. (Low-High) , then Star Rating (High-Low) , then Comparison rate^ p.a. (Low-High) . Additional filters may have been applied, which impact the results displayed in the table - filters can be applied or removed at any time.

promoted
Fees & charges apply. Australian Credit Licence 237391.
Interest rate p.a.
Comparison rate^ p.a.
Monthly repayment
5.54%
Variable
5.57%
$2,852
Principal & Interest
IMB Bank Budget Home Loan
Enjoy up to $4,000 cashback when you switch your eligible home loan to IMB Bank. Terms and Conditions Apply
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Low Rate Home Loan
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Apply online in minutes!
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Canstar's Most Satisfied Customers - Bank - 2022
Fees & charges apply. Australian Credit Licence 237391. See Terms & Conditions. ^ Comparison Rate Warning. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR
Fees & charges apply. Australian Credit Licence 237391. See Terms & Conditions. ^ Comparison Rate Warning. Star Rating for a $500k owner occupier variable rate P+I loan at 80% LVR

About cheap home loans

Whether you’re in the market for your first home, next home, refinancing your existing loan or looking to buy an investment property for your financial future, getting a cheap home loan could appeal. So, how can you save money on your home loan interest rate?

When seeking out a cheap home loan, you may have questions, such as what lenders offer the best deals, what features to look for, and even whether it’s better to go for a fixed or variable rate loan, or a combination of the two.

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. Steve Mickenbecker, Group Executive Financial Services, says that upfront and ongoing fees may risk cancelling 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’ advertised home loan rate. It’s a good idea to weigh up all the options.

Frequently Asked Questions about cheap home loans

When comparing home loans, it is important to consider features such as the interest rate, whether the loan is fixed or variable, the fees and charges attached, the features of the loan itself, the repayment frequency and the term of the loan.

Interest rate

The higher the interest rate on a loan, the more expensive it will be to pay back. There are factors that can influence the interest rate you’re charged, and different kinds of rate that you can choose from.

Fees and charges

Home loans typically come with fees and charges attached, and these can come in the form of both establishment and ongoing fees. These will vary depending on the lender, but the comparison rate of a home loan is designed to represent the total cost of a loan, taking into account interest rates as well as fees and charges.

Features of the loan

There are a variety of features that can come bundled up with a home loan, and while it’s not always the case, it’s often possible that the more features a loan has, the more expensive it might be in terms of fees and charges. Features of a loan can include an offset account, a redraw facility and even bundled credit cards.

It’s worth keeping in mind that some loans such as variable rate loans have features that can allow you to pay off your home loan more frequently, which could save you money in the long term.

Repayment term

Home loans are paid off over a period of time, and this period is agreed upon by you and your lender. While a 25–30 year term might be standard, some lenders offer longer terms of up to 40 years. It’s worth keeping in mind that a longer loan term can mean lower monthly repayments, but over time, the interest you pay can add up and become expensive.

Loan-to-value ratio

Loan-to-value ratio (LVR) is a calculation lenders use to express the size of a home loan as a percentage of the value of a property. If you pay a 20% deposit, for example, then the LVR of your home loan would be 80%. This figure is important because, if you have a deposit of less than 20% of the purchase price of the property you wish to buy, it’s likely you’ll be charged lenders mortgage insurance (LMI). You might be eligible for an LMI discount and some first home buyers can also avoid paying LMI.

LMI can add tens of thousands of dollars to the cost over the life of a home loan. What this generally means is the more deposit you can save, the cheaper your home loan could ultimately be, because in addition to borrowing less, you could avoid LMI.

There are certain schemes for first home buyers to help people to get on the property ladder with low or no deposit. Keep in mind that if you’re considering taking out a home loan with a low or no deposit, you could be at greater risk of going into negative equity if you have a high loan-to-value ratio. It could be a good idea to seek professional financial advice to support your decision making.

When you take out a home loan, you can opt for a fixed interest rate, meaning the interest you pay will stay the same over the life of the loan, or a variable interest rate, which can go up or down with the cash rate. You can also opt for a split loan that combines the two.

Locking in a fixed rate may or may not make your home loan cheaper. The Australian Government’s Moneysmart website says the pros of a fixed rate includes that it makes budgeting easier and you could save money by having fewer loan features.

But you should weigh this up against missing out on potential savings if interest rates go down. Also, it may cost you more if you fix your interest rate then decide to switch loans later, as a break fee might apply.

Your credit score is a number that represents how trustworthy you may be as a borrower.

There is generally no strict credit score requirement for a home loan, but having a good credit score may mean you are eligible for a home loan from a wider pool of lenders based on their eligibility and lending criteria. This means you could have more products and a wider range of rates to choose from with a higher credit score.

A history of regular repayments of your bills might lead to a higher credit score, while a history of defaults and late payments might lead to a lower one. If your credit score is not as high as you would like it to be, Canstar has tips to improve it.

But bear in mind that your credit score is just one of the factors that lenders may take into account when reviewing your home loan application. Your income, deposit amount and expenses are among the other factors that are likely to be considered.

You can use Canstar’s home loan comparison table, above, to help you find a cheap loan.

All you need to do is enter the amount of the loan you’re after, the purpose of the loan such as whether it’s for a first time home, refinance, investment etc., and finally the state or territory in which you live.

You can then sort the results in order of lowest interest rate, lowest comparison rate or the monthly repayments.

You can further filter your results if you want to narrow your search to specific providers or a Canstar rating.

It’s a good idea to compare several providers to look beyond just the monthly repayments to find a cheap home loan that suits your needs.

Latest in home loans

Canstar Star Ratings and Awards

Looking for an award-winning product or to switch providers or brands? Canstar rates products based on price and features in our Star Ratings and Awards. Our expert Research team shares insights about which products offer 5-Star value and which providers offer outstanding value overall. We also reveal which providers have the most satisfied customers in our dedicated Customer Satisfaction Awards.

Home Loan Awards  Refinance Home Loan Awards

About the authors

Alasdair Duncan, Content Editor

Alasdair Duncan
Alasdair Duncan is Canstar's Content Editor, specialising in home loans, property and lifestyle topics. He has written more than 500 articles for Canstar and his work is widely referenced by other publishers and media outlets, including Yahoo FinanceThe New DailyThe Motley Fool and Sky News. He has featured as a guest author for property website homely.com.au. In his more than 15 years working in the media, Alasdair has written for a broad range of publications. Before joining Canstar, he was a News Editor at Pedestrian.TV, part of Australia’s leading youth media group. His work has also appeared on ABC News, Junkee, Rolling Stone, Kotaku, the Sydney Star Observer and The Brag. He has a Bachelor of Laws (Honours) and a Bachelor of Arts with a major in Journalism from the University of Queensland, and has completed a RG146 compliance training course. When he is not writing about finance for Canstar, Alasdair can probably be found at the beach with his two dogs or listening to podcasts about pop music. You can follow Alasdair on LinkedIn.

Joshua Sale, GM, Research

Joshua Sale

As Canstar’s Ratings Manager, Josh Sale is responsible for the methodology and delivery of Canstar’s Home Loans Star Ratings and Awards and the Home Loan Refinance Awards. With tertiary qualifications in economics and finance, Josh has worked behind the scenes for the last five years to develop Star Ratings and Awards that help connect consumers with the right home loan for them.

Josh is passionate about helping consumers get hands-on with their home loans, always reminding home buyers that finding the right loan can be as important for your finances as negotiating a fair property purchase price. Josh has been interviewed by media outlets such as the Australian Financial Reviewnews.com.au and Money Magazine, discussing topics including home loan equity and wider finance trends.

When it comes to Josh’s own property journey, the home loans expert once bought two houses in the same transaction when he ensured the cubby house his daughter loved was listed on the purchase contract for his new home.

You can follow Josh on LinkedIn, and Canstar on Twitter and Facebook.


Important information

For those that love the detail

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.

Canstar may earn a fee from its Online Partners for referrals from its website tables, and from sponsorship or promotion of certain products. Fees payable by product providers for referrals and sponsorship or promotion may vary between providers, website position, and revenue model. Sponsorship/promotion fees may be higher than referral fees. If a product is sponsored or promoted, it’s an ad and it is clearly marked as such. An ad might appear in different places on our website, such as in comparison tables and articles. Ads may be displayed in a fixed position in a table, regardless of the product's rating, price or other attributes. The location of an ad doesn’t indicate any ranking or rating by Canstar. Payment of fees for ads does not influence our Star Ratings. See How We Get Paid to find out more. Payment of fees for ads does not influence our Star Ratings or Awards.

Home loan Star Ratings are updated daily. During periods of significant market fluctuations, such as adjustments to the reserve bank's cash rate, star rating updates will be paused for variable home loans until the market has stabilised. However, advertised interest rates of products will continue to be updated as advised by lenders. The results don’t include every provider in the market and we may not compare all features relevant to you. Current rates and fees are displayed and may be different to what was rated. You can find a description of the initial sort order below the table. You can use the sort buttons at the top of each column to re-order the display. Learn more about our Home Loans Star Rating Methodology. The rating shown is only one factor to take into account when considering products. The table defaults to display only home loans available to somebody borrowing up to 80% of the property value, but you can use the filters to change this. Similar products might have different features and fees depending on the amount you borrow. Contact the lender for details.

The products and Star Ratings in the table might not match your exact inputs in the selector. Sometimes the methodology uses profiles with categories or bands (e.g. income, loan amount or monthly spend), but sometimes a single methodology, without any categories or bands, is applied.  The results will show the products that most closely match your selection, based on our profiles. If you are unsure about any terms used in the comparison table please refer to the glossary.

What is a Target Market Determination?

A Target Market Determination (‘TMD’) is a document that explains which people particular financial products may be suitable for (the target market) and sets out any conditions around how financial products can be distributed to consumers.

Why do product issuers provide Target Market Determinations?

From 5 October 2021, TMDs are compulsory for most financial products.

Issuers and distributors of financial products must take reasonable steps that are likely to result in financial products reaching consumers in the target market defined by the product issuer.

We recommend that you consider the TMD before making a purchase decision. Contact the product issuer directly for a copy of the TMD.

Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. Canstar provides information about credit products. We’re not suggesting or recommending a particular credit product for you. If you decide to apply for a loan, you will deal directly with the provider, not with Canstar. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. It’s important you check rates and product information directly with the provider. For more information, read our Detailed Disclosure. ^Read the Comparison Rate Warning.

Canstar is not providing a recommendation for your individual circumstances. We cannot and do not recommend that any particular product is suitable for you. 

We provide links to our Online Partners. These are brands that may pay Canstar a fee for referring you. Our tables default to display only our Online Partners’ products initially, you can adjust the Online Partner Filter to see all of the products available for comparison on Canstar’s website. We provide these links so that you can click through to the product provider’s website to get more information. The provision of these links does not constitute a recommendation by Canstar.

Before you elect to terminate or modify existing lending arrangements, we recommend you consider (i) your personal circumstances, and (ii) any associated fees, exit costs and application costs that may be applicable as well as the impact these changes could have on you. We suggest you consider seeking independent advice from a qualified adviser.

“Interest-only loan” generally means a loan where you will only pay interest during the interest-only term. That means you won’t be making payments which reduce debt during the interest-only term.