5 home loans worth switching to in 2020

By Katherine O'Chee · Friday, 3 January 2020 · 3 min read

Fact Checked

New year, new me… or rather, new home loan?

If saving money is top of your to-do list for 2020 and you’re paying off a mortgage, here’s the good news.

Right now there are over 20 lenders in Mozo’s database with variable interest rate home loans for owner occupiers under 3 percent.

The average Big 4 Bank variable home loan interest rate currently sits at 3.98% p.a.^ so if you are one of the 81% of Australians still with a Big 4 Bank, here’s a snapshot of some of the low cost home loans that could save you thousands over the life of your loan if you made the switch in 2020.

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Important disclosures and comparison rate warning*

Important disclosures

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Comparison rate warning

WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

How Initial Monthly Repayments figures are estimated

Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

UBank - UHomeLoan - Discount Offer

Variable rates starting from 2.84% p.a. (2.84% p.a. comparison rate*)
Free extra repayments and redraw facility
No upfront and ongoing fees

Find out more

This is a low-rate online home loan that you can apply for and manage from the comfort of your couch. To snatch up competitive variable rate of 2.84% (2.84% p.a. comparison rate*) you’ll need at least 20% equity in your home and refinance at least $200,000. The UHomeLoan Discount Offer has no application or service fees whatsoever, and plenty of flexible features, including free extra repayments, a redraw facility and a split account option. It even won two Mozo Experts Choice Awards in 2019 for best Low Cost Home Loan and best Split Home Loan.^^ For those who want the security of a big bank, UBank is backed by NAB.

Homestar - Variable Rate Loan

Variable rates starting from 2.74% p.a. (2.77% p.a. comparison rate*)
Free extra repayments and redraw facility
100% offset account

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This home loan has one of the lowest variable rates in the market at 2.74% p.a. (2.77% p.a. comparison rate*) but you will need at least 30% equity in your home and be refinancing between $150,000 and $849,999. It comes with perks like free extra repayments, a redraw facility, a split account option, and an offset account that can help to reduce your interest costs. You also have the flexibility to choose between weekly, fortnightly or monthly repayments. And if that isn’t enough, this home loan scored three Mozo Experts Choice Awards in 2019 for best Low Cost Home Loan, best Offset Home Loan and best Investor Home Loan.^^

loans.com.au - Smart Home Loan 80

Variable rates starting from 2.88% p.a. (2.90% p.a. comparison rate*)
Free extra repayments and redraw facility
No application or service fees

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For owner-occupiers with at least 20% equity in their home and refinancing from $50,000 up to $1 million, Loans.com.au’s Smart home loan offers rates as low as 2.88% p.a. (2.90% p.a. comparison rate*). There are no application or ongoing fees to worry about. You can make free extra repayments and access a fee-free redraw facility should you need to ‘dip’ into those extra repayments down the track. This loan also has a split loan option if you want the security of fixing a portion of your loan as well. Talk about value!

Athena - Liberate Variable Home Loan

Variable rates starting from 2.84% p.a. (2.80% p.a. comparison rate*)
Free extra repayments and redraw facility
No upfront or ongoing fees

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Newcomer Athena’s Variable Home Loan has an ultra-low 2.84% p.a. interest rate (2.80% p.a. comparison rate*). The minimum loan amount is $100,000 and you’ll need at least 20% equity in your home or equivalent deposit. With more talk of rate cuts in 2020, Athena also offers an automatic rate-match feature, an Australian first, which means that existing customers always get the same rates on like-for-like loans as new customers. You can also wave goodbye to application, valuation and service fees, and say hello to flexible features like free extra repayments, a free redraw facility and the option to make repayments weekly, fortnightly or monthly.

Tic:Toc - Variable Home Loan

Variable rates starting from 2.79% p.a. (2.80% p.a. comparison rate*)
Offset account available ($10 monthly fee)
Fast approval process

Find out more

If you’re in a rush to refinance, Tic:Toc’s Variable Home Loan boasts a mortgage approval process that takes just 22 minutes! For refinancers with at least 10% equity in their home and borrowing between $50,000 and $2,000,000, Tic:Toc offers a competitive rate of 2.79% p.a. (2.80% p.a. comparison rate*). This home loan also has no application or service fees (although a PEXA service fee may be payable), and you can enjoy benefits like an offset account available on an opt-in basis ($10 monthly fee applies), a fee-free redraw facility and flexible repayments. No wonder Tic:Toc took out the title of 2019 Mozo Experts Choice Online Home Lender of the Year.^^

Ready to kick off 2020 with a killer home loan under your belt? Make your first stop our home loans comparison table, where you can compare more options and find a deal that suits you.

^Big 4 average variable home loan rate, as of 2 January 2020.

^^For a full list of winners, check out the 2019 Mozo Experts Choice Home Loan Awards page.

^* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

^** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

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