Best Home Loans and Mortgages Compared
Choosing the best home loan can mean securing a loan which is easy to use and encourages you to repay your mortgage sooner while working in harmony with your other financial products. However, using a home loan which does not give you the access, information or features you need can see you struggling to meet your repayments and while repaying a mortgage requires diligence and commitment, it shouldn’t be the hardest part of your day.
Learn more about the different home loan features available by clicking on the different types of home loans listed below.
What Makes A Home Loan The Best?
Knowing the importance of choosing the best home loan, and finding and applying for a home loan which is best for you are two very different things. That is why you need to know how to recognise which home loans are the right match for you. The best home loan:
- Is the loan type which best suits you. A home loan application is about much more than just saving the deposit amount you need, you also need to know the type of loan you are looking for because this can save you time when making comparisons because you can easily disregard loans which are not aimed at you, and spend more time comparing the types of loans which do suit you.
Featured Home Loan
Loans.com.au – Dream Catcher offers one of the lowest interest rate in the market with $0 application and split loan facility.
- Interest Rate of 6.13%
- Comparison Rate of 6.47%
- Application Fee of $0
- Maximum LVR With LMI: 80%
- Minimum Borrowing: $50,000
- Maximum Borrowing: $750,000
Best Home Loan Comparison
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au – Dream Catcher |
A home loan offer with $0 application fee and a low interest rate. | 6.13% | 6.47% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 UBank UHomeLoan (Variable Rate) |
Featured home loan with a low interest rate and $0 ongoing fee.The maximum loan amount needs to be 80% of the property value. | 6.14% | 6.14% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan |
Voted the best loan for first home buyers, this loan offers no application or ongoing fees and a stack of great features including unlimited redraw and 100% interest offsetting. | 6.22% | 6.45% | $0 / $345 | 95% | $150,000 / $2,500,000 |
|
 AMP Essential Home Loan |
The AMP Essential Home Loan offers no ongoing fees and a very competitive variable rate. From one of the most trusted companies in Australia. | 6.35% | 6.37% | $350 / $ 0 | 90% | $40,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Fixed Home Loan – 2 Year Fixed Rate |
A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 6.16% | 6.49% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
 HomeStar No Fee 100% Offset |
Enjoy no fees and zero mortgage insurance to pay. HomeStars offset loan allow flexible repayment frequency, interest only repayments and visa debit card and full banking functionality. | 6.46% | 6.46% | $0 / $0 | 90% | $250,000 / $750,000 |
|
 Resi Home Loans – Smart Option Home Loan |
The Smart Option Home Loan offers you a super low rate for 1 year. Plus no ongoing and no application fees. | 6.49% | 6.99% | $0 / $0 | 95% | $50,000 / $20,000,000 |
|
Illawarra Home Loans Bank Beater Home Loan |
A very low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.18% | 6.46% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
State Custodians Mortgage Company Breathe Easy Offset Loan |
Awarded the 2011 Non bank Lender of the Year this fantastic product comes with no fees and a stack of features including unlimited redraw and free 100% interest offsetting. | 6.47% | 6.36% | $0 / $0 | 95% | $150,000 / $1,000,000 |
|
Resi Home Loans – Flexi Fix |
A low interest rate, Plus fix up to 50% of your home loan at a low fixed rate and the other 50% at a low variable rate. | 5.75% | 6.69% | $0 / $0 | 95% | $50,000 / $2,000,000 |
|
 Community First True Basic Home Loan |
An easy to manage loan with all the standard features available as an option. Enjoy no annual or monthly account keeping fees. | 6.84% | 6.92% | $500 / $0 | 95% | $100,000 / $1,000,000 |
|
 MyRate Advantage Rate Loan |
Zero fees, unlimited redraws and interest only repayments. One of the best all-round loans on the market, perfect for first home buyers or those looking to refinance. | 6.35% | 6.35% | $0 / $0 | 95% | $100,000 / $2,000,000 |
|
HomeStar Advantage Loan |
No upfront or annual fees offering unlimited free redraw and full banking functionality. Borrow up to 95% of the property value. | 6.53% | 6.53% | $0 / $0 | 95% | $150,000 / $2,000,000 |
|
- Will suit your needs now and into the future. While you may not expect to be able to find a home loan which best suits your needs now and will continue to fit perfectly for the next 30 years. However you can look at your needs over the next 5 to 10 years to make sure that the home loan you are applying for as the best features from that period. Not only is it hard to project where you will be in more than 10 years, after that period it is also easier to refinance if you need to, to a loan which better suits your needs.
- The benefits of the features will outweigh the costs. The more features you get on a home loan the more likely it is you will pay higher fees for those features. However many home loan features are designed to help you manage your cash flow more easily, or repay your mortgage faster so rather than automatically choosing the cheapest home loan thinking it will be the best, consider whether the benefits of these extra features will outweigh the fees associated with using those features. Ongoing fees for home loan features can also often be negotiated with your lender and you may be able to save on annual or monthly fees to get the features which are best for your home loan
How To Find The Best Home Loan For You
To help you make sure you are choosing the best home loan for your needs, consider some common choices you will need to make, and how those choices can save you money and make your loan easier to manage. To find the best home loan for you consider options such as:
- Are you buying an investment property or are you an owner occupier? Whether you are buying a home as an investment or as your own home can affect grants you are eligible for, for example and how you manage your repayments and interest at tax time. However there can also be significant differences between home loans and residential investment loans so make sure you are comparing the right type of loan were your needs.
- Choosing the best loan term. It is easy to find a loan which allows you to make additional repayments at no extra cost however it can also pay to take the time to consider how much faster of those extra repayments will allow you to repay your home loan. For example if he intends to pay off your loan in 20 years, don’t choose a loan term of 30 years because you may be charged for discharging your loan early and these fees can sometimes can do all of the good work you’ve done in making extra repayments.
- Interest only repayments or principal and interest repayments. Making interest only repayments is usually an option popular with investors because these interest repayments are tax deductible and so over the course of the year investors can get back all the money paid into the loan. You may also be paying only interest repayments during a construction loan if you are building a new house. This allows you to make smaller monthly repayments because you are probably still paying rent until your new house is built.
Your Borrowing Power
Lenders will take several factors into consideration when deciding what they are comfortable lending and what they expect the borrower is able to repay. The lender should not be the only one doing this, however. You, as the borrower, should be making your own assessment as to what you feel you are able to comfortably pay back to the lender.
It is also very important that you have a buffer amount. Rates fluctuate and depending on the type of loan you choose, you may have to make payments that are higher than expected. A good rule of thumb is to expect the rates to go up at 2%. Make sure you have enough money to make payments that include those extra interest rate percentage points.
Different Types of Home Loans
Introductory Loans
These are also referred to as honeymoon loans. Their object is to attract borrowers because of the low interest rate but the rate only lasts for one year. After the year has expired, the loan will go up to the current standard variable rate.
BORROWER BEWARE: Please note that there are usually penalties for terminating your loan early. If you want to refinance your loan to a lower rate, there are various fees that you will need to take into consideration before dropping the loan.
This loan has a term during which time you make regular repayments. The variable aspect refers to the interest rate. This will change at certain times according to the terms of the loan.
This is the most flexible type of loan. For instance, you are able to redraw extra money you have paid into the loan. You can also switch to a fixed rate loan after a certain time period and there are few penalties if you want to refinance and switch to another loan.
Borrower’s Tip: If you decide to go with this type of loan, you can ask your lender for a discount. The typical discount can be up to 0.7% if you borrow at least $250,000 and if you borrow above and beyond $500,000 you can expect and even higher discount.
These basic loans are also known as ‘no frills’ loans. They offer the borrower a lowered interest rate than the one found in the standard variable rate loans but they also offer fewer features. Some of these loans can be extremely restrictive. These restrictions may include the inability to make extra mortgage repayments above the minimum repayments. It is a good idea to be certain you have one that suits your needs.
Good News: Some of these basic loans now have favourable features such as a redraw facility.
This loan has a fixed interest rate for a certain period. The term is usually one to five years. After this time period has passed, a new fixed rate is applied. Or, the loan can go back to the lender’s standard variable rate.
Fixed-rate loans can be very desirable if interest rates go up. They are extremely disappointing not to mention expensive if rates go down. Fixed-rate loans also may not allow you to make extra repayments without some sort of penalty.
BORROWER BEWARE: Take note of interest rate expectations because if interest rates are expected to rise then the fixed rate will more than likely be above the variable rate. And, if the interest rate is expected to drop then the rate could be lower. Make yourself aware of the break costs and other fees before you decide on this loan. Find particular products that allow you to make extra payments without penalty.
This loan is divided into two different parts. One part of the mortgage is a fixed-rate loan and the other part is a variable rate loan. Let’s say, for example, you have a loan that is $250,000. One part of your loan, $100,000 could be charged at a variable rate, $50,000 could be charged at a two-year fixed rate and the remaining $100,000 could be charged at a five year fixed interest rate.
Borrower’s Tip: There are some disadvantages in terms of exit fees with this loan but if you are concerned about interest rates rising, this loan is flexible and could provide you some sense of security against those expectations.
Finding the right home loan is not difficult if you have the right information and the right insider tips that will lead you in the right direction. The right loan will allow you to save the most money in the long run. Finding the best home loan is not something that can be rushed, but when you have the right tools such as our comparison tables, experienced staff and comprehensive reviews, the process can be made smoother and easier because of the range of the best home loans available in Australia the one which is best to you is just waiting to be found.
If as an alternative you would like to get into contact with a trusted mortgage broker to help you find the best loan for your situation you can now use Home Loan Finders Mortgage Broker Finder service to retrieve details of brokers operating in your area.
- New South Wales mortgage brokers.
- Queensland mortgage brokers.
- Western Australia mortgage brokers.
- Tasmania mortgage brokers.
- South Australia mortgage brokers.
- Northern Territory mortgage brokers.
- Australian Capital Territory mortgage brokers.
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