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Cheapest Home Loans
Posted April 18th, 2010
and last modified January 27th, 2012
Find the Cheapest Home Loan
The cheapest home loan is every mortgage holders dream; however we each have our own ideas of what a cheap loan really means, and whether we are willing to trade to receive additional features in exchange for paying a few fees. Simply searching for the cheapest home loan is not the way to find the best home loan for you, instead you need to find a loan which is the cheapest for you to apply for and to manage, and which allows you to affordability and effectively manage your mortgage in a way which suits you.
Featured Cheapest Home Loan
Apply for Loans.com.au – Dream Catcher and get a low interest rate, plus no application fee, no valuation and no additional repayment fee.
- 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
Featured Low Rate Loans
| 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 one of the lowest available home loan interest rates. | 6.13% | 6.47% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 UBank UHomeLoan (Variable Rate) |
Offering a $0 application and ongoing fee, Plus a low interest rate | 6.14% | 6.14% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Home Loan |
A low variable rate and a further 0.5% rate cut after 5 years. | 6.18% | 6.46% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan |
Awarded the 2011 Best Loan for First Home Buyers this feature-packed loan rewards customers with a bonus rate drop of 0.20% after 5 years. | 6.22% | 6.45% | $0 / $345 | 95% | $150,000 / $2,500,000 |
|
 Resi Home Loans – Smart Option Home Loan |
The Smart Option Home Loan offers you a super low rate for 1 year, then reverting to a low variable rate. | 6.49% | 6.99% | $0 / $0 | 95% | $50,000 / $20,000,000 |
|
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 |
|
 MyRate Advantage Rate Loan |
This fee free loan comes with unlimited redraws and a range of repayment options for added flexibility. | 6.35% | 6.35% | $0 / $0 | 95% | $100,000 / $2,000,000 |
|
State Custodians Mortgage Company Breathe Easy Offset Loan |
No application fee and a low interest rate. Awarded the Best Loan for First Home Buyers. | 6.47% | 6.36% | $0 / $0 | 95% | $150,000 / $1,000,000 |
|
 HomeStar Advantage Loan |
No fees and unlimited redraw | 6.53% | 6.53% | $0 / $0 | 95% | $150,000 / $2,000,000 |
|
HomeStar Gold Loyalty Home Loan |
Zero fees and an interest rate drop of 0.15% after 5 years to slash your repayments. | 6.48% | 6.40% | $0 / $0 | 95% | $750,000 / $2,000,000 |
|
 Community First True Basic Home Loan |
Community Firsts lowest ongoing variable rate. A flexible loan that would not weigh you down with fees. | 6.84% | 6.92% | $500 / $0 | 95% | $100,000 / $1,000,000 |
|
 Commonwealth Bank No Fee Variable Rate |
No fees and a competitive rate from a member of the big four. | 6.61% | 6.61% | $0 / $0 | 80% | $150,000 / $0 |
|
What Are The Cheapest Home Loans?
The cheapest home loan for you may not be the one which is the cheapest for your neighbour to run for example and so you need to determine which home loan is the cheapest based on your borrowing capacity, your deposit, the features you need, the repayments you will make and how soon you plan to repay your loan. Depending on your needs the cheapest home loan could be:
- A low interest rate and low fee loan. This is probably what most people think about when they first think of the cheapest home loan. The interest rate and the application and ongoing fees are often foremost in the minds of loan applicants as they compare the products which suit them. A basic home loan will always strive to offer you the lowest interest rate and will have lower application fees and probably few or no ongoing fees. If you prefer standard options and few frills a basic home loan could be the cheapest for you.
- One which helps you save on interest charges. There is more than one way around high interest charges and you don’t always have to choose the loan with the lowest interest rate upfront. You can instead choose a home loan which has a features such as an offset account, which is linked savings account with your loan. The fun is in your offset account will reduce the amount of interest you pay on your loan because it for example, you have a $200,000 loan and $10,000 in your offset account you will only pay interest on $190,000 because your savings have offset the interest charges making a loan with an offset account a cheaper option.
- A loan which doesn’t charge you using your money your way. Your home loan is one of the most important financial products you will ever have and it can affect how you use all of your other financial products and manage finances. Therefore the cheapest and most affordable home loan will be one which lets you use your account your way without charging the extra, so if you are likely to make extra repayments the cheapest home loan is one that doesn’t charge you for this feature for example.
- Low repayments. Basically when you talk about cheap home loans you are referring to home loans that do not cost you a lot of money. Most people will reflect this statement with a low repayment amount. The less you pay on your repayments each week the more money you will save.
- Reduced loan term. Even though you may have cheap repayments the term of the loan may be longer. So, don’t be fooled if the home loan may seem to have expensive weekly repayments but a short home loan term. If the term of the home loan is short but your repayments are high then you will be still saving money on the interest that is charged to your account.
Be Informed About The Cheapest Basic Home Loans
When it comes to choosing the very cheapest, most basic loan it is important to keep in mind that you get what you pay for. If the most important thing to you is a low interest rate and a loan is little or no fees then the cheapest basic home loan available could be best for you. Just keep in mind that with the cheapest home loans you may also be getting:
- Low rates, low fees, few extra features. The cheapest home loans are often the cheapest because they are the simplest, and do not include a lot of other features which have become standard on most other types of home loans. Therefore if you choose the cheapest home loan don’t expect features such as offset accounts or free additional payments.
- A rigid home loan. Often with the cheapest home loan you can benefit most from making just the minimum monthly repayment every month and not trying to make the loan is something that it’s not. If you want the kind of person who wants to set and forget their home loan then the cheapest basic loan could be right for you, because not only are additional payment is likely to be charged fees, some basic home loans won’t allow you to make additional repayments or redraw from your loan at all.
- A variable rate. The cheapest home loans often have a variable rate so that you can take advantage of drops in the official interest rate. It also means that this interest-rate will be one of the lowest you will find on any Australian home loan in the market, so if you are looking for the cheapest, the simplest interest charges a basic home loan could be the cheapest option for you.
How do you get a Cheap Home Loan
The total amount you pay on a home loan will be affected by a few factors. This section will explain what the main factors are that will affect the amount you pay on a home loan. These factors are:
- Interest rate. The main factor that will affect the amount you pay on the home loan will be the interest rate. When applying for a loan it is essential that you do the research so you are able to get the lowest interest rate. By getting a lower interest rate you can potentially save thousands of dollars over the course of your loan.
- Additional features. Many home loans offer additional features that are designed to save you money. If these additional features are available will your home loan then it is important to take advantage of them. Firstly, they can save you a lot of money. Secondly, if you do not take advantage of them then you are essentially paying additional money to allow other people to save money by using them.
- Fees that are charged with the loan. The additional fees that are charged with the loan are often not included in the total cost of the loan. If you have to pay many of the additional fees you will end up paying more on the home loan.
How can you Find the Cheapest Home Loan
With thousands of home loans available in Australia it can be near impossible to find the best one for you. This section will explain how you can find the cheapest home loan. You can find the cheapest home loan by:
- Home loan comparison calculators. One of the best ways to find the cheapest home loan is to use a home loan comparison calculator. The home loan comparison calculators will use the information of the amounts that you plan on borrowing and compare them to all the loans that are available. If you use this tool you can be very sure that you will get the cheapest home loan that is available at the time.
- Browse the websites. Once the home loan calculator gives you a few results to choose from it is important that you do a bit of further research. If you do a bit of further research then you may find an additional feature of a home loan or a fee free home loan that will save you a bit of extra money each time you make a repayment and Home Loan Finder can help point you to the right provider, so you don’t miss the perfect offer.
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- Discount Mortgages – Can You Get One?
While basic home loans do come with discounted interest rates when compared with other mortgages with more features, if you’re able to provide a larger deposit you’ll have your pick of home loan features and still enjoy a lower repayment amount over the life of the loan, not to mention the interest you will save when borrowing a lower principle amount. - Cheapest Home Loans
The cheapest home loans may well be the cheapest in interest repayments, but as the various home loans on the market have different and valuable features that, although coming at a cost, can give added benefit to your general financial well being while paying off your home loan. It is therefore well worth the search in regard to value for money.
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