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Best Low Rate Home Loans Comparison
Posted March 31st, 2010
and last modified January 27th, 2012
How to Find a Low Rate Home Loan to save money on your interest repayments
A low rate home loan is every mortgage holders’ dream, because while interest rates may have hit a record low as Australia recovered from the global financial crisis, official interest rates are never static for very long and even the best economists can’t always predict where rates are going and when they’re going to get there. Low rate home loans should be approached with the same comparisons and the same critical eye and other home loan products, keeping in mind that a low rate home loan is a category all of its own, with its own specific features and benefits.
Featured Low Rate Home Loan
Apply for Loans.com.au – Dream Catcher Home Loan and enjoy a low rate and a lots of features to give you freedom with your repayments.
- 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 Home 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 |
Save money with a low variable rate and no application fee. | 6.13% | 6.47% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 State Custodians Mortgage Company Standard Variable Offset Loan |
Awarded the 2011 Non bank Lender of the Year 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 |
|
 Illawarra Home Loans Bank Beater Home Loan |
A 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 |
|
 Resi Home Loans – Smart Option Home Loan |
The Smart Option Home Loan offers you a super low fixed rate for 1 year. Plus no ongoing and no application fees. | 6.49% | 6.99% | $0 / $0 | 95% | $50,000 / $20,000,000 |
|
State Custodians Mortgage Company Breathe Easy Offset Loan |
Awarded Best Non Bank Basic Variable July 2011 this fantastic loan rewards customers with no fees and a range of features to keep repayments flexible. | 6.47% | 6.36% | $0 / $0 | 95% | $150,000 / $1,000,000 |
|
 Easy Street Honeymoon Home Loan Special |
Save money with a no service fee and a low interest rate. | 5.89% | 6.56% | $500 / $0 | 95% | $100,000 / $2,500,000 |
|
 UBank UHomeLoan (Variable Rate) |
One of the market leading variable interest rates. The maximum loan amount needs to be 80% of the property value. | 6.14% | 6.14% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 HomeStar No Fee 100% Offset |
No fees and no mortgage insurance to pay. Offers, full redraw facility, interest only repayments and ability to borrow 80% of property value. | 6.46% | 6.46% | $0 / $0 | 90% | $250,000 / $750,000 |
|
 NAB Tailored Home Loan – Variable Rate |
Discount of up to 0.70% p.a. off the standard variable home loan rate with the NAB Choice Package. | 7.22% | 7.35% | $600 / $10 | 95% | $20,000 / $10,000,000 |
|
 Commonwealth Bank No Fee Variable Rate |
Enjoy zero fees and choice in repayment frequencies and special repayments. | 6.61% | 6.61% | $0 / $0 | 80% | $150,000 / $0 |
|
 Westpac Flexi First Option Home Loan |
Westpac Basic Low Variable Interest Rate Loan. | 6.66% | 6.71% | $600 / $0 | 92% | $25,000 / $10,000,000 |
|
 ANZ Breakfree Home Loan Package ($150,000 – $249,999) |
Take advantage of up to 0.70% off the Standard Variable Rate. | 6.80% | $ 0 / $375 | 80% | $150,000 / $249,999 |
|
Features of Low Rate Home Loans
A low interest rate home loan may sound like the perfect mortgage product, but it is not that everybody. You need to determine what you want out of your home loan and how you intend to use your loan in conjunction with your other natural products now and into the future. Consider your needs in relation to the common features of low rate home loans, which include:
- A lower interest rate. When compared to loans which are not specifically low rate home loans, the interest rate offered can be almost 1% lower. Of course you will have to keep in mind that a low rate home loan is still home loan and as such the rate will be lower as compared to other home loan products, so don’t expect a rate of 3 or 4%.
- A variable interest rate. A low rate home loan will also often require that you are charged a variable interest rate on your mortgage. This means that the interest rate on your loan may fluctuate as official rates rise and your lender raises their standard variable rates too. At the same time a variable loan interest-rate home loan also allows you to take advantage of drops in the official rates.
- Shop around for fixed rate periods. Some low rate home loans will also offer you the option to fix your low rate for a set period. A fixed interest rate gives you the security of ongoing low repayments, which you know will be the same each month. The fixed rate periods on low rate home loans are typically for shorter periods and where you may normally be able to choose a fixed-rate period of up to 10 years, on a low rate home loan you may only be able to choose a period of three years for example.
- Few other features. The flagship feature of a low rate home loan is of course its low rate, and the lenders can afford to offer such a low rate because these loans do not have a myriad of other features which they have to maintain for you. Therefore don’t expect a redraw facility, an offset account, loan portability or other features which are commonly included now on more standard home loans. If you want both a low rate home loan with features which can help you manage your mortgage, shop around for the combination which suits you.
Benefits of Low Rate Home Loans
While you may be wondering whether you are suited to foregoing typical home loan features in favour of a lower interest rate, consider whether the benefits of a low rate home loan would benefit you in your situation:
- Lower repayments. With a lower interest rate you are required to make a lower monthly repayment because you have less interest to repay. This may suit you forward your first home loan if you want to adjust easily to being mortgage holder, or you may choose to consistently paid more than the minimum amount, to repay your loan sooner.
- Less impact from official rate rises. Even though most low rate home loans have a variable rate, if your loan interest rate is starting out lower, then it is going to take more time and more rises for it to affect you and your budget, as compared to use you were using a standard home loan product.
- A low fuss easy to manage mortgage. If you like things to be straightforward and simple than a low rate home loan may be the best you, because you don’t have a range of new loan features to learn how to use, and to remember to use to get value out of the fees you are paying for them, and instead you can simply make your monthly repayments and go about the business of paying off your mortgage simply and easily.
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