Australia's cheapest home loans in December 2024
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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
- 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.
Fixed Rate Home Loans
SWS Bank Premium 3yr Fixed Rate Home Loan
- Fixed rates from 4.99% (6.15% comparison rate*) - min 20% deposit
- Fast and paperless online application process
- Free extra repayments (up to 20K per annum)
Lock in a competitive interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan. Get the flexibility of loan split options and redraw facility. There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a 20% deposit and a speedy online application. No offset account. 800k minimum loan deposit. Other fees may be applicable. T&Cs apply.
IMB Bank 2 year Fixed Rate Home Loan
- 5.69% p.a. 2 year fixed rate (6.28% p.a. comparison rate*)
- Up to $4,000 cashback (T&Cs apply)
- Free Internet and Mobile Banking redraws
Get the peace of mind of a competitive fixed rate home loan for 2 years with IMB and score up to $4,000 cashback in your pocket once approved (T&Cs apply). You have the freedom to make up to 12 months repayments in advance without penalties, plus you’ll have free Internet and Mobile Banking redraws (T&Cs apply). There’s only a 5% deposit required and you have the flexibility to split your home loan as required. No offset account.
Editor's picks: Home Loan deals for December
Macquarie Basic Variable Home Loan
- 6.14% and (6.16% 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
- 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.
loans.com.au - Variable Home Loan 90
- 6.04% variable rate (6.06% comparison rate*)
- Free extra repayments and redraw + optional offset account
- Available to borrowers with 90% LVR
Aussie owned loans.com.au has been taking on the banks with low rate online home loans since 2011, and the new Variable Home Loan 90 boasts a competitive rate for borrowers with a 10% deposit or equity or more. Flexible features include unlimited free extra repayments, free redraw and an optional offset account for 0.10%, plus there are no pesky ongoing fees to pay. Available for loans of up to $2 million.
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 loan interest rates in December 2024
Despite the average variable rate in the Mozo database being 6.74% p.a.†, the lowest home loan rate we track is Bank Australia's Clean Energy Home Loan Eco Plus, at 5.88% p.a. (6.20% p.a. comparison rate*) for the first 60 months.
Out of the offers we track, the lowest variable home loan rates (LVR <80%, $400K) are:
- Gateway Bank Green Plus Home Loan (Package) | 5.85% p.a. (6.13% p.a. comparison rate*)
- 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*)
- Police Credit Union Low Rate Home Loan Special Offer | 5.89% p.a. (5.95% p.a. comparison rate*).
- The Mutual Bank Special Budget Home Loan | 5.89% p.a. (5.90% p.a. comparison rate*).
The lowest fixed-rate home loans (LVR <80%, $400K) are:
- 1 year: Community First Bank Accelerator Fixed Home Loan | 5.74% p.a. (6.39% p.a. comparison rate*)
- 2 years: BankVic Fixed Rate Home Loan | 5.49% p.a. (6.03% p.a. comparison rate*)
- 3 years: Bank Australia Clean Energy Home Loan Eco Plus | 5.34% p.a. (6.05% p.a. comparison rate*)
- 4 years: People's Choice Fixed Rate Home Loan | 5.49% p.a. (6.17% p.a. comparison rate*)
- 5 years: Heritage Bank Fixed Loan | 5.49% p.a. (7.42% p.a. comparison rate*).
Source: Mozo database, correct as at 1 December 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 December 2024.
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* 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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