Australia's cheapest home loans in April 2024

Whether you’re buying a new property or refinancing an existing mortgage, knowing where to find the best value home loans is one of the best things you can do to save more money over the length of your loan.

But what does that look like? Well, it depends on your circumstances, financial needs, and the loan’s features. For example, a customer with a clean credit score will likely receive a better interest rate than a borrower with poor credit.

Another home loan feature that can help reduce the cost of your loan is the ability to make free extra repayments. This handy feature can help you pay your loan off faster, therefore minimising the amount of interest you’re actually paying overall.

Similarly, a loan with flexible repayment options lets you tailor your repayment frequency to your budget and pay schedule. It could also help to choose a shorter repayment period to reduce the total amount of interest.

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.

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.

  1. Check Interest rates as the amount you’re paying can make a difference in how cheap the loan is.
  2. 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.
  3. 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 April 2024

Last year saw home loans get much more expensive, although the cash rate has sat at 4.35% for a while now. In 2024, the RBA will only meet 8 times this year (instead of the previous years 11) with the third meeting scheduled for next month on the 7th May 2024. If CPI data continues to slow to the RBA's 2-3% target range, then another hold or even a cut could be on the cards.

However, even if rates remain steady, they are still stratospheric compared to the same time last year. Currently, the average variable rate for principal & interest home loans is 6.83% p.a. in the Mozo database, while the lowest variable rate is 5.80% p.a. (comparison rate 6.83% p.a.).

Cash-back offers for refinance home loans have also largely dried up from the market, but this has always been a temporary way to get customers in the door. What’s more important is to compare interest rates, fees, and features when comparing the true cost of a home loan. 

Out of the offers we track, the lowest variable home loan rates (LVR < 80%, $400K) are:

  • G&C Mutual Bank | 5.80% p.a. (5.83% p.a. comparison rate*) 
  • Homeloans360 | 5.89% p.a. (5.89% p.a. comparison rate*)
  • Pacific Mortgage Group | 5.89% p.a. (5.89% p.a. comparison rate*)
  • The Mutual Bank | 5.89% p.a. (5.90% p.a. comparison rate*)

Averages calculated using data available in the Mozo database, correct as of 1 April 2024. 

When looking for a cheap home loan, it can be difficult to know which home loan offer is the best in terms of features and interest rates. Usually, a good low-cost home loan that offers some of these features is a great guideline for what to look for. All that being said, it can still be tricky when you’re a first time home buyer.

That’s why at Mozo, we tried to simplify the process. After sifting through 475 home loans from 99 lenders, our Mozo Experts found the most affordable options worthy of a win in the 2024 Mozo Experts Choice Home Loan Awards^.

So, to help get you one step closer to your dream home, below are some of the cheapest home loans in Australia that received a 2024 Mozo Experts Choice Award^ in our Low Cost Home Loan award category.

Remember: the list below only details a small selection of the home loans crowned in the awards this year. Head to the 2024 Mozo Experts Choice Home Loan Awards page for the full list of winners across all the categories we assess, and read how these loans were selected in our home loan awards methodology report.

Low Cost Home Loan category winners

Unloan - Variable Home Loan
  • 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
  • Extra repayments
  • 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.

Fixed Rate Home Loan winners

BCU Fixed Rate
  • 5.99% p.a. for 2 years (6.24% p.a. comparison rate*)
  • No establishment or annual ongoing fee
  • Just 5% deposit required
  • 2024 Mozo Experts Choice Award winner^
Find out more

Member-owned BCU won a 2024 Mozo Expert’s Choice^ for this fixed rate home loan and with no establishment fee, no ongoing annual fee, and competitive rates, it’s easy to see why. The 2 year rate is currently 5.99% p.a (6.24% p.a. comparison rate*) after which it reverts to 6.29% p.a. You can lock in up to 5 years and there is an option to make weekly, fortnightly or monthly repayments. During the fixed period you can also make extra repayments of up to $25,000. The loan is also available with just a 5% deposit.

Editor's picks: Home Loan deals for April

UBank - Neat Home Loan
  • Variable rates from 6.14% (6.16% comparison rate*) - min 40% deposit
  • Fast and paperless online application process
  • Free extra repayments
Find out more

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.

Macquarie Basic Variable Home Loan
  • 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.

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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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