Home Loan Comparison

Why should I compare home loan interest rates? 

With hundreds of home loans on the market in Australia, the sheer choice available to you could be overwhelming. Whether you’re a first home buyer looking for a loan that fits your lifestyle or a refinancer seeking a cheaper rate, comparing your options and continuing to check home loan interest rates over the life of your loan can pay off.

Here are three great reasons to compare: 

1. You could save tens of thousands in interest

The difference between a 6.5% p.a. interest rate and a 7% p.a. interest rate may look trivial but, over the lifetime of a home loan, it makes a huge difference. If you were to borrow $600,000 over 30 years, that 0.5% difference could mean keeping more than $71,000 in your pocket instead of handing it over to the bank!

2. You could be missing out on a better deal 

Your lender might count on your loyalty, but sticking with the same one for too long can be costly. If you took out a home loan a few years ago and haven’t taken a look at it in a while, you might be surprised at how your rate stacks up to others on the market. 

3. You could find features that fit your life

The best home loan for you is likely one that fits your needs at your stage of life. Whether you’re an investor who wants a great deal or you’re looking to buy your forever home and aim to make extra repayments, comparing can help you find a home loan that will work with you, not against you. 

Insider tip: Review your credit cards 

Lenders look at your total credit limit, not just what you owe. Reducing your limit or cancelling your cards altogether could boost your borrowing power and help your chances of approval.

Who are the best home loan providers in Australia?

While the big four banks — ANZ, Commonwealth Bank, NAB and Westpac — dominate the home loan lending market, there are numerous smaller players that might be a good fit for you. 

There’s no one-size-fits-all option for the ‘best’ home loan provider in Australia. The best for you will depend on your needs, budget, and goals, like whether you’re buying your first home, refinancing your current one, or adding an investment property to your portfolio.

To get you started in your search, you could consider Canstar’s annual Home Loan Awards, which recognise lenders offering outstanding value to Australians.

Canstar’s 2026 Home Loan Awards: Winners of our Outstanding Value Awards for home lenders

• Australian Mutual Bank
• BankVic
• Hume Bank
• Pacific Mortgage Group (PMG)
• People’s Choice (now part of People First Bank)
• Unity Bank
• Up Bank

You can see a more detailed breakdown of our Home Loan Award winners, as well as the winners of the variable, fixed, and investment categories, by visiting Canstar’s 2026 Home Loan Awards.

You can also explore the winners of Canstar’s First Home Buyers Awards, Home Loan Refinance Awards, and Fixed Rate Home Loan Awards. 

What is the best home loan rate?

The ‘best’ home loan rate is subjective and depends on your needs and circumstances. The ‘best’ for an investor looking to refinance may look very different from the best rate for someone purchasing a family home. 

• As a first home buyer: The best home loan might be one that allows you to purchase a property with a low deposit and make extra repayments, so you can get a head start on paying down the balance of your loan. 
• As a refinancer: If you’ve been paying off your home loan for a few years, the best loan for you could be one that lets you take advantage of equity you’ve built in your home, leveraging it for a lower rate. 
• As an investor: If your main aim is to realise gains on your investment, the best loan may be one with a low interest rate, with features like an offset account to help reduce your interest repayments, or an interest-only period that could help free up cash flow. 

What is the cheapest home loan rate?

When you’re looking for a great deal on a home loan, it’s important to understand that the cheapest or lowest home loan rate doesn’t always mean the best. For one thing, upfront and ongoing fees can eat into what you’d save in interest. Also, ‘more expensive’ home loans can come with useful features, like the ability to make extra repayments, offset accounts, and redraw facilities, that could save you more than a lower interest rate would.

Some of the lowest rates on our database

Below is a selection of some of the lowest home loan rates on Canstar’s database at the time of writing: 

Source: Canstar, 28/09/2026. Figures are based on owner-occupier variable and fixed home loans in Canstar’s database for any loan amount or LVR with principal & interest (P&I) repayments, excluding construction and green loans. Lowest rates are selected based on interest rate, comparison rate, and maximum LVR. Comparison rates are calculated for a $150,000 loan over a 25-year term.

Note that a loan’s maximum loan-to-value ratio (LVR) is the highest percentage of a property’s purchase price you can borrow using that product. If a loan has a max LVR of 80%, that means you’ll need to provide a deposit of at least 20% to borrow no more than 80% of the property’s value.

Insider tip: Make fortnightly repayments to pay off your loan faster

Switching from monthly to fortnightly repayments can shave years off a home loan, provided the amount you pay each fortnight is half the minimum monthly repayment. This can see you making the equivalent of one extra monthly repayment per year, as most months have more than two fortnights.

What are the different types of home loans in Australia?

There are an array of home loans on the market. To make the task of comparing a bit easier, you can mix and match these three main choices to build your loan: the rate type, the repayment style, and the loan purpose. Here’s a quick breakdown of how these three work, and how you can combine them. 

1. The rate type: Fixed vs variable (or split) 

Variable rates are flexible, and can move up and down whenever your lender decides to change them. This typically happens when the Reserve Bank of Australia (RBA) changes the cash rate. Variable rates leave you vulnerable to rate rises, which can increase your repayments, but you can also take advantage of rate cuts and may have greater access to appealing extra features like offset accounts and redraw facilities. 

Fixed rates allow you to lock in an interest rate for a set period of time – typically from one to five years. Your repayments will remain consistent throughout that time, which is great if you value stability. Fixed rates protect you from rate rises, but the tradeoff is that you can’t take advantage of rate cuts, either. You’ll also likely be barred or capped on making extra repayments, and generally won’t have access to as many features as your variable rate counterparts. 

Split rate loans can give you the best of both worlds. You can keep a chunk of your loan at a fixed rate for peace of mind and have a variable rate on the rest. 

2. The repayment type: Principal and interest (P&I) vs interest-only 

P&I repayments will see you paying off a chunk of your home loan balance with each mortgage payment, as well as paying some interest to the bank. This is the standard way most Aussies pay off a home, because the overall balance owing shrinks over time until, eventually, the mortgage is paid off. 

Interest-only repayments can be useful if you want a bit of breathing room or to maximise your cashflow. Your repayments will be lower, as you’ll only be paying interest that accrues on your debt, and won’t be paying anything off the balance. But it will probably cost you more in the long run, as your principal balance will spend more time accruing interest. 

3. The purpose: Owner occupier vs investor 

Owner occupier home loans are for people who plan to live in a house after buying it. In other words, this is the loan you would take out to buy your first pad or the family home. Banks will generally offer their lowest rates to owner occupiers, as they perceive these loans as less of a risk. 

Investor home loans are geared towards people looking to buy a property in order to rent it out as an investment or flip it for a profit. Banks view these kinds of loans as slightly higher risk, so interest rates are usually a bit higher. 

Regardless of which type of home loan you choose, it’s important to bear in mind that a home loan is almost always secured against the property it’s related to. If you’re unable to repay the loan, the lender may be able to evict you from the property and sell it to settle your debt. If you have another person act as a guarantor for your home loan, that person may have to pay back the debt if you can’t meet your repayments.

What is refinancing and how does it work?

Refinancing means switching your existing home loan for a new one. This can be a good way to secure a better rate or more favourable terms if your current lender or loan is no longer cutting the mustard. A number of lenders offer incentives to refinancers who switch to them, usually in the form of cashback, but sometimes they might offer frequent flyer points or other perks. 

There are a number of reasons you might refinance. It might be that you want a lower interest rate or to unlock your equity in your home to renovate or purchase a new property. Or you may find you're no longer satisfied with your current lender and are ready for a change. 

Before you switch, it often pays to give your current lender a call and let them know you’re planning on leaving – you may be able to negotiate a lower rate with them and save yourself the admin and paperwork.

If your lender won’t come to the party or you decide to go ahead and refinance anyway, you’ll need to:

What is a comparison rate and why does it matter?

The comparison rate gives you an idea of the ‘true’ cost of a home loan. Expressed as a percentage, lenders in Australia are legally required to display a comparison rate next to their advertised interest rate, or ‘headline rate’.

This is important because the headline rate doesn’t always tell the whole story. The comparison rate of a loan is calculated based on: 

• Advertised interest rate
• Upfront fees (like application, settlement, and valuation fees)
• Ongoing fees (like monthly account-keeping fees or annual package fees) 

A loan with a low rate may seem appealing, but the comparison rate can tell a different story. Every interest rate you see on Canstar’s website will have a comparison rate alongside it.

How much can I borrow for a home loan?

The amount you can spend to buy a home will likely be the combination of your savings and your borrowing power. Your home loan borrowing power depends on your personal financial situation, like your income, your financial commitments (like any debts, loans, or credit cards you have), your credit history, as well as your spending habits. 

You can use Canstar’s Home Loan Borrowing Power Calculator to get a picture of how much you could borrow with a home loan. Consider this hypothetical example of Brad and Alex, a couple looking to buy a property. 

• Brad and Alex earn a combined $200,000 (post-tax) per year
• They live relatively frugally and have no outstanding loans
• Alex has a credit card, with a limit of $5,000
• Their annual expenses work out at around $40,000 per year 

According to Canstar’s Home Loan Borrowing Power Calculator, Brad and Alex could borrow approximately $1,120,000 if they were to take out a 30-year loan with a rate of 7% p.a. 

How much do you need to earn to afford a house or unit?

There is no hard and fast amount you’ll need to earn to afford a property, however, your earnings generally must be enough for you to cover your repayments without falling into mortgage stress. 

There are varying definitions of mortgage stress, but it’s commonly defined as a situation where more than 30% of your household income goes towards mortgage repayments. 

Note that, when considering your home loan application, banks must make sure you can comfortably afford your repayments, both now and if interest rates rise. For this reason, they will consider your income and living expenses and assess your ability to make repayments at a loan’s current rate, and at a rate of 3% more, on the assumption that interest rates could rise. While non-bank lenders don’t have to use the same serviceability buffer, many perform their own, similar tests.

Insider tip: Avoid changing jobs, if possible

Banks and lenders tend to look favourably on stable employment, so if you’ve recently changed jobs, waiting until your probation ends before applying for a home loan could put you in a stronger position.

How much do I need for a home loan deposit?

In Australia, it’s previously been traditional to have a deposit of at least 20% of the value of the property you want to buy. Say you want to make an offer of $750,000 on a property – for a 20% deposit, you will need $150,000 saved. 

These days, it’s common to purchase a property with a deposit of less than 20%. Though, if you do, you’re likely to be slugged with lenders mortgage insurance (LMI), which can be costly. 

However, if you qualify for the likes of the Australian Government’s 5% Deposit Scheme or have a guarantor, you might be able to buy a property with a deposit of less than 5% without paying for LMI. You could also check to see if you’re eligible for one of the various first home owners grants available from state and territory governments.

What is an LVR (loan-to-value ratio)?

A loan-to-value ratio, or LVR, is an important home loan calculation based on the size of your deposit and the value of a property. Put simply, LVR is the percentage of a property’s value that you need to borrow. 

You might see a home loan deal advertised for borrowers with an LVR of 80% or less. That means you’ll need to borrow 80% or less of a property’s value to qualify. In other words, your deposit will need to be 20% or more of the property’s value. 

You can calculate LVR like this: LVR = (Loan Amount / Property Value) x 100

Why does it matter? LVR is important as many lenders reserve their best mortgage rates for buyers with a low LVR. 

Can I buy a property with an LVR of over 80%?

While it’s possible to purchase a property with a deposit of less than 20%, a lender will likely view you and your mortgage as riskier and may want to charge you LMI in order to protect itself. 

This is because there’s a smaller buffer between your property’s value and your loan value. If you purchase a home with a smaller deposit and default on your home loan, your lender could repossess your property and sell it. But, if property prices fall or it can’t get a price equal to or higher than the value of your loan, it might be left in the red. 

LMI can step in in this situation (though, you might still be chased for the debt).

What is lenders mortgage insurance (LMI)?

Lenders mortgage insurance (LMI) is an insurance policy that protects the lender, and the borrower typically pays for it. Its one-off cost may be charged to you when you take out a home loan. It can either be paid upfront, or rolled into the balance of the loan, to be paid off over the lifetime of the mortgage, with interest. 

LMI exists to protect your lender in the event you default on your home loan and typically applies if you have a deposit of 20% or less.

How much does LMI cost? 

The cost of LMI varies depending on the size of your loan and whether you’re an owner occupier or investor. It can be in the thousands or tens of thousands of dollars. LMI is non-refundable, even if you refinance your home loan or pay it off early. (Though, there are some exceptions to this rule).

Can you avoid LMI?

Yes, it’s definitely possible to avoid paying costly LMI, but it may depend on your job. Some banks offer LMI waivers for people in certain high-income, stable professions, like doctors, lawyers or engineers. This is because lenders may view these kinds of borrowers as less risky and want to attract their business. 

If you work in one of these professions, you may be able to get a home loan with a deposit as low as 5% without paying for LMI, although this depends on the lender.

It’s also possible to enter the housing market with a deposit as low as 5% by taking advantage of the Federal Government’s 5% Deposit Scheme, which is available to eligible first home-buyers. 

Finally, some lenders don’t charge LMI for borrowers with LVRs of up to 90%. Though, they might charge significantly higher rates on low-deposit home loans.

What is a home loan guarantor?

Borrowing with a guarantor can be another way to avoid LMI. 

A guarantor is a third party, usually a parent or close relative, who uses their own assets as extra security to help a buyer secure financing. A guarantor doesn’t just hand over cash. Typically, they will agree to sign over a portion of their own home equity to act as security and agree to cover the buyer’s repayments in the event that they can’t meet them.

If you agree to go guarantor on a home loan, it’s not forever. Typically, a guarantor can be released from a loan if it’s refinanced once a borrower has paid off enough of the loan.

Insider tip: Keep your repayments high 

When the cash rate drops, banks and lenders tend to drop their variable rates, lowering your minimum repayments. If you keep your repayments at the old, higher level, you could make extra repayments without feeling a hit to your budget.

What home loan fees should you know about?

There are two main types of home loan fees to be aware of – upfront fees, which apply when you take out a loan, and ongoing fees, which are charged over the lifetime of the loan.

Upfront fees include application fees, settlement fees, or Lenders Mortgage Insurance (LMI), while ongoing fees might come in the form of package fees (for bundling different products like home loans and credit cards together) or annual fees.

There are also fees that come at the end of a home loan. When you discharge your loan (pay it off) or refinance, your bank or lender is likely to pass on the administrative costs in the form of a discharge fee.

Likewise, if you want to break out of a fixed rate home loan early, your lender will charge what’s known as a break fee. These can be expensive, and lenders charge them to compensate for future losses when you end your loan agreement.

How is home loan interest calculated?

When you take out a home loan, you need to repay the principal (the amount borrowed) plus interest. Interest is calculated as a percentage of your loan balance on a daily basis. Your loan repayment, however, is usually charged on a monthly basis.

As a hypothetical example, if you had a home loan balance of $400,000 and an interest rate of 5% p.a., your monthly interest charge would be:

• $400,000 x 0.05 / 365 = $54.79 daily interest (rounded out)
• $54.79 x 31 days (or however many days are in a given month) = $1,698.49 of interest

What is a mortgage amortisation schedule?

Mortgage amortisation refers to how the split between how much you pay towards your loan principal and towards interest shifts over time. 

The principal is the balance owing, and this is the figure that interest is charged on. 

At the beginning of your loan, the majority of your repayments tend to go towards interest, as your principal balance is high. But the longer you keep paying it off, the more of each repayment goes towards the principal. 

An amortisation schedule is a breakdown of all your repayments, showing you exactly how much goes towards principal and how much towards interest, and how the balance shifts over time. 

Canstar’s mortgage repayment calculator includes an amortisation schedule (in the form of a graph), which you can use to get an idea of how your own home loan repayments might look over time.

Offset vs redraw: What’s the difference?

Offset accounts and redraw facilities are extra features that might come with, or you might add to, your home loan. Typically available with variable rate loans, they can make a big difference when it comes to paying off your loan. However, some lenders charge fees for access to these, and it might be worth balancing any cost against potential benefits. 

What is a home loan offset account?

An offset account is a bank account linked to your home loan that can help reduce the interest charged on the loan. The money in your account is offset daily against your loan balance, minimising the interest you pay. 

Say you owe $400,000 on your home loan but have $200,000 in an offset – you’ll only pay interest on the remaining $200,000. 

Putting your salary and everyday savings in an offset can shrink your mortgage interest charges, and you’ll still have access to your cash like any other transaction account. 

Importantly, your repayments will remain the same no matter how much money is in your offset account, but more will go towards paying off your principal balance and less towards interest. 

Additionally, not all lenders treat offset accounts equally. A 100% offset account will offset 100% of the funds within against a mortgage’s principal balance. However, some lenders might offer 80% or even 60% offset accounts, which can be less effective. 

What is a home loan redraw facility?

A home loan redraw facility enables the borrower to withdraw funds they’ve already paid above their minimum repayment. 

Much like an offset account, extra funds paid towards a home loan will reduce its principal balance, which in turn will reduce the amount of interest you pay. 

The difference is that a redraw facility is not an everyday transaction account. Instead, if you need access to your funds (perhaps for a home renovation or holiday), you can ‘redraw’ them into an everyday account and make the payment from there. 

What is equity?

Equity is the portion of a property that you actually own. It’s the difference between the current value of the property and the balance owing on your home loan. You can borrow against your equity by increasing the size of your home loan or taking out a new loan using your property as security. You might do this for a variety of purposes: perhaps to fund the deposit on another house or a home renovation, or even to consolidate other debts.

That said, you can’t borrow against the whole amount. Your usable equity, the amount you can actually borrow against, is generally capped at 80% of your property’s value. 

What is cross collateralisation?

Cross collateralisation is a process in which the asset that’s used to secure one loan is used to secure a second one. It’s usually a way for investors to use the equity in one property to purchase a new one without needing a cash deposit. 

This strategy can be useful for investors looking to build a property portfolio by bundling multiple properties together under the one ‘net’. It’s risky, however, as it gives the bank more control over all the properties, and you can’t sell or refinance one property without involving all the others.

Insider tip: Clean up your act before you apply

Lenders want to know you’re a responsible borrower. Avoiding things like gambling transactions and overdrafts in the months before you apply for a home loan can present your financial position in the best possible light.

Should I fix my home loan?

The decision of whether to fix your home loan likely comes down to which you value more: certainty or flexibility. To break it down further, consider the case for each. 

The case for certainty (fixing your home loan) 

One appealing aspect of a fixed home loan rate is peace of mind. Your repayments on a fixed rate won’t budge, meaning you’ll be able to plan your household budget with a higher degree of certainty and you’ll be protected from rate rises. If the RBA hikes the cash rate, leading banks and lenders to raise their own rates, you won’t feel the effect on your repayments. 

That said, fixing your rate means you’re locked in. If inflation drops and interest rates fall, you could be stuck paying a higher rate than the market average. And if you want to repay or refinance your loan, you may end up facing expensive break costs. 

The case for flexibility (choosing a variable rate) 

With a variable rate home loan, your interest rate can move up and down with the market, meaning you’re vulnerable to rate rises, but could also benefit from rate cuts. 

Variable rate home loans also typically come with more features than fixed rate ones, so you might have access to an offset account or redraw facility and the option to make unlimited additional repayments on your home loan. You can also refinance your home loan when you want, without paying break costs. The risk, of course, is if rates rise sharply, you might be forced to tighten your belt.

The each-way bet (a split loan)

You don’t have to choose between a fixed or variable rate if you don’t want to – a split rate loan can let you take advantage of both. 

For example, you could choose to fix the rate on 60% of your loan and leave 40% variable. This would give you a degree of predictability on the fixed portion, while perhaps taking advantage of interest savings from an offset account or the ability to make extra repayments on the variable portion. 

How do you apply for a home loan?

The typical steps to apply for a home loan are as follows:

1. Work out what you can afford and save for a deposit, usually 5% to 20% of a property’s purchase price 
2. Gather your paperwork, including your ID, proof of income and savings, and a breakdown of your living expenses and debts 
3. Apply for pre-approval with your bank or lender of choice – this isn’t required, but can help you make an offer with confidence 
4. Find a property you like that suits your budget and make an offer to buy it
5. Submit your home loan application, often done through your bank or lender’s website or with help from a mortgage broker
6. Wait while your lender assesses your finances and gets a valuation of the property before granting you approval
7. Sign your loan documents and wait for settlement 

If you’re refinancing an existing home loan, you can probably skip quite a few steps and beeline to your lender of choice or mortgage broker, where you’ll likely find much of the process is taken care of for you.

How long does it take to get approved for a home loan?

There’s no guaranteed timeline for home loan approval. In some cases, you might be granted approval in a matter of hours, in others it can take two to four weeks from the time you hand over your paperwork. There are two stages to the approval process: 

The pre-approval stage 

Some lenders say they can complete pre-approval in 48 hours or less but, if your finances are more complex, your application is missing any key information, or your lender is busy, it can take longer.

The unconditional approval stage

This is the point where a lender conducts their assessment of both you, in more detail, and the property, and this can take time. After this process, you'll be granted final home loan approval.

What is home loan pre-approval?

One way to speed up the final approvals process can be to get home loan pre-approval ahead of time. This is a conditional ‘thumbs up’ from a bank or lender, to let you know exactly how much money it’s likely to be willing to lend to you before you make an offer on a house. 

The process of applying for pre-approval is much the same as applying for a home loan – a lender will ask to see information about your finances, like payslips, tax returns, bank statements and so on – and will tell you an exact figure that you could borrow from them.

Home loan pre-approval can be appealing for a number of reasons: 

A few words of caution: pre-approval is not a 100% guarantee of a loan. Your lender will want to look closer at your finances and consider the property you’re buying too. Likewise, pre-approval only lasts for 60 to 90 days, so you’ll need to reapply if it lapses while you’re still on the house hunt.

How does a mortgage broker work?

A mortgage broker is a professional who can deal with banks and lenders on your behalf, helping you to arrange a home loan. If you’re looking for a mortgage broker to guide you through the home loan journey, Canstar has a partnership with digital broker Finspo. Finspo can support you through your purchase of a property and beyond, and give you access to features like an online portal where you can track your application in real-time.

A good mortgage broker will: 

Mortgage brokers can be appealing, especially for first-time or inexperienced buyers, as they can help simplify and demystify the home loan process. That said, you’ll need to be mindful of one key thing: 

• Limited lending panels: Mortgage brokers work with a selection of lenders and don’t survey the entire home loan market. Additionally, many lenders – including some of the big four banks – openly don’t offer their lowest advertised rates to borrowers going through a mortgage broker. So, you may not have access to the most competitive rates or products if you use a broker.

Canstar’s mortgage broker partner Finspo offers customers access to a broad panel of lenders, as well as qualified, expert support. All are experienced professionals with industry certification and accreditation, and are members of the Finance Brokers Association of Australia (FBAA).