Australia's cheapest home loans in September 2024
![A woman and her dog enjoying the warm sunshine on their home's balcony](https://cdn.mozo.com.au/images/atwood/10441/up%20pic%20(1).png)
Whether you’re buying a new home or refinancing, a cheap home loan rate is one of the best ways to save money on your mortgage.
So, which banks have the cheapest home loan interest rates in Australia?
Award-winning Low Cost Home Loans
As part of the 2024 Mozo Experts Choice Awards^, we sifted through 475 home loans from 99 lenders to find the best home loans in Australia.
Below, you’ll find some of the cheapest home loans to win a Low Cost Home Loan award in 2024, as well as our editor’s picks for this month.
For the full list of award-winning home loans, check out the 2024 Mozo Experts Choice Home Loan Awards^ page, or learn about how the winners were selected in the Awards methodology report.
Low Cost Home Loans^
Unloan - Variable Home Loan
![Thumbnail icon for Unloan](http://cdn.mozo.com.au/images/thumbnails/thumb-11859.png)
- Variable rates from 5.99% p.a. (5.90% p.a. comparison rate*)
- Rate discount annually (T&Cs apply)
- Free extra repayments and redraws
- Low cost home loan winner - Mozo Experts Choice Awards 2023 & 2024^
Expert verdict:
Unloan’s Variable Home Loan has taken out a low cost home loan award for the second year running in the Mozo Experts Choice Awards^. Built by CommBank, Unloan offers owner-occupiers a super low 5.99% p.a. variable rate (5.90% p.a. comparison rate*) along with a loyalty discount that shaves 1 basis point off your interest every year for up to 30 years. Loan features include free extra repayments and redraw, and there are no pesky fees to pay. Available for loans of up to $10M. Minimum 20% deposit.
Bendigo Bank - Express Home Loan
![Thumbnail icon for Bendigo Bank](http://cdn.mozo.com.au/images/thumbnails/thumb-9883.png)
- 6.01% p.a. variable rate (6.14% p.a. comparison rate*)
- Free redraw facility
- Offset account
Expert verdict:
Bendigo Bank’s Express Home Loan for owner-occupiers offers a variable rate home loan of 6.01% with a comparison rate of 6.14% for a loan term of up to 30 years. This loan also allows for extra repayments alongside access to a free redraw facility and an offset account—all with an LVR of below 90%. Also, borrowers who take out a loan with Bendigo’s Express Home Loan will be able to choose their repayment frequency with choices ranging from weekly, fortnightly, and monthly. Just remember that you’ll have a $10 monthly service fee and an upfront valuation and settlement fee to budget for. Also, if you plan on switching providers or when you pay off the loan, you will have a $350 discharge fee to keep in mind.
Editor's pick: Home Loan deals for September
Macquarie Basic Variable Home Loan
![Thumbnail icon for Macquarie](http://cdn.mozo.com.au/images/thumbnails/thumb-9693.png)
- 6.15% and (6.17% comparison rate*)
- Zero application or ongoing fees
- Free redraw and extra repayments
With competitive variable interest rates starting at 6.15% p.a. (6.17% p.a. comparison rate*), Macquarie’s Basic Home Loan brings with it minimal fees and a range of features like free extra repayments and a free redraw facility. Together with a split account option so you can split your loan between variable and fixed, the Basic Home Loan from Macquarie is available to owner occupiers and investors alike. 20% deposit required.
UBank - Neat Home Loan
![Thumbnail icon for ubank](http://cdn.mozo.com.au/images/thumbnails/thumb-11815.png)
- Variable rates from 6.09% (6.11% comparison rate*) - min 40% deposit
- Fast and paperless online application process
- Free extra repayments
UBank has made a name for itself as one of Australia's best value online lenders, and its new Neat Home Loan is a case in point. This low cost variable home loan rewards borrowers with lower loan-to-value-ratios (LVRs) with its best rates, while also being light on fees. Features include free extra repayments and redraw. Plus, UBank is backed by NAB so you get all of the savings an online lender can offer, as well as the security of big bank backing.
PCU 3 Year Fixed Rate Home Loan Special Offer
![Thumbnail icon for Police Credit Union](http://cdn.mozo.com.au/images/thumbnails/thumb-13193.png)
- Competitive 3 year fixed rate of 5.49% p.a (6.97% p.a. comparison)
- No annual or monthly fees
- Make additional repayments up to $20,000 per year
Get repayment certainty with Police Credit Union’s 3 Year Fixed Rate Home Loan Special Offer. There are no annual or monthly fees to pay and you can make additional repayments up to $20,000 per year to pay down your mortgage sooner. This offer is available for first home buyers and refinancers. Reverts to the Discount Variable Home Loan interest rate after the fixed rate period.
What makes a cheap home loan
So what do cheap home loans look like? The first thing you’ll see with a cheap home loan is that they have a lower interest rate. Low interest rates mean that you’re paying less over the length of your loan for borrowing money from the bank. Just make sure to pay attention to the comparison rate as this will reflect what you’ll be paying when including other factors such as annual or account-keeping fees.
Another thing to look out for with cheap home loans is that they have low or no fees. While some fees can seem small or inconsequential, over time they can end up leading to a lot of money going to the bank instead of your savings account.
Loan terms can also make a difference in how cheap a home loan ends up being. While a shorter-term loan means higher monthly payments, it also means that you’ll not be paying more interest on the loan. Most loans tend to be 25-30 years, and while 5 years doesn’t seem like a lot, the amount of interest paid can really add up.
How to find the cheapest home loans
It can be difficult to know which home loan offers the best in terms of features and interest rates. Usually, a good low-cost home loan offers a competitive interest rate and features that can help borrowers to reduce their interest rates or monthly repayments.
One feature that can make your home loans cheaper are offset accounts. With an offset account, you can keep a lump sum of cash in the account which will help to reduce the amount of interest payable.
Another handy feature that can make your home loan cheaper is a free extra repayments option. With these, any extra savings you come by can help you to pay the loan off faster and can also reduce how much you’re repaying on a regular basis. By paying the loan off faster and reducing the amount you’re paying, the less you’ll find yourself paying in interest which can save loads of money in the long term.
Who are cheap home loans for?
There are two kinds of home buyers when it comes to cheap home loans, owner-occupiers and investors. For the most part, the difference between these two kinds of borrowers is what they intend to use the property for.
Owner-occupiers are people who take out a home loan to buy a property that they plan to live in. Generally, owner-occupiers will be required to have a loan-to-value ratio (LVR) of 80% which means that a home worth $500,000 will usually need a loan worth $400,000 and a deposit of $100,000.
Investors are people who take out home loans so that they can rent the property out (or use it as something like an Airbnb). Investor focused home loans will generally have a higher interest rate than owner-occupier focused loans as banks tend to view these as being a bit more of a riskier loan.
What kind of cheap home loans are there?
The two main kinds of cheap home loans would be variable rate home loans and fixed rate home loans. There are also split home loans where half of the loan is fixed and the other is variable.
A variable rate home loan means that at any time the bank can announce a change in the interest rate. In Australia, variable rate home loans tend to be the most commonly held kind of home loan.
Fixed rate home loans are loans that have an interest rate that is set for a certain period of time. In general, they will tend to have a higher interest rate in comparison to a variable rate home loan.
How to compare cheap home loans
When looking for a cheap home loan, it’s not always obvious that you’ve actually got the cheapest loan available. So, one of the best ways of getting the cheapest home loan is by comparing home loan providers.
However, it can be difficult to know how to compare a home loan as the cheapness of a home loan isn’t just down to the interest rate listed—after all, a low interest loan with high fees isn’t really that cheap when you look at the long term.
- Check Interest rates as the amount you’re paying can make a difference in how cheap the loan is.
- Compare fees while fees can seem inconsequential, the amount you could be paying monthly or annually can build up over the life of the loan.
- Look for features such as offset accounts and extra repayments as they can help to reduce the interest you would be paying otherwise.
Cheapest home loans in September 2024
Despite the average variable rate in the Mozo database being 6.80% p.a.†, the lowest home loan rate we track is Homeloans360’s Owner Variable Home Loan, at 5.89% p.a. (5.89% p.a. comparison rate*).
Out of the offers we track, the lowest variable home loan rates (LVR < 80%, $400K) are:
- Homeloans360 Owner Variable Home Loan | 5.89% p.a. (5.89% p.a. comparison rate*)
- Pacific Mortgage Group Standard Variable Home Loan | 5.89% p.a. (5.89% p.a. comparison rate*)
- The Mutual Bank Special Budget Home Loan | 5.89% p.a. (5.90% p.a. comparison rate*)
- Community First Bank Basic Variable Home Loan | 5.94% p.a. (5.99% p.a. comparison rate*)
- Reduce Home Loans Eco Home Loan Variable | 5.94% p.a. (5.99% p.a. comparison rate*).
The lowest fixed-rate home loans (LVR <80%, $400K) are:
- 1-year: The Capricornian Fixed Premium Choice Home Loan | 5.74% p.a. (7.31% comparison rate*)
- 2-years: HSBC Fixed Rate Home Loan | 5.69% p.a. (6.54% p.a comparison rate*)
- 3-years: Police Credit Union 3 Year Fixed Rate Home Loan Special Offer | 5.49% p.a. (6.97% p.a comparison rate*)
- 4-years: HSBC Fixed Rate Home Loan | 5.59% p.a. (6.40% p.a comparison rate*)
- 5-years: HSBC Fixed Rate Home Loan | 5.59% p.a. (6.35% p.a comparison rate*).
Source: Mozo database, correct as at 1 September 2024.
†Average variable rate based on an owner-occupier, paying principal and interest on a $400,000 home loan over 25 years, with a loan-to-value ratio of <80%. Data taken from the Mozo database, correct as at 1 September 2024.
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Looking for an even wider range of home loans to compare? Pay a visit to the Mozo home loan comparison hub to view the latest interest rates from more than 90 mortgage lenders.
* 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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