What is capital growth, and how can you maximise it?

Collage of people jumping over the chasm of capital decline.

Whenever we invest in a property, price and personal wishlists usually rank top of our considerations. But savvy buyers know there’s another rat in this race: capital growth. 

Let’s unpack why capital growth matters to your purchasing decision – and how you can make the most of it.

Why capital growth matters

Collage of people shaking hands over a house.

Capital growth describes how much a property’s value increases over time. If you buy a house for $1 million then later sell for $1.3 million, the capital growth was $300,000. 

In general, property values tend to increase over time anyway, but this can be misleading if you're new to it. Just because the median price of a suburb goes up, doesn’t mean every property price within it did. It just means the area is trending up as a whole, while some homes may not improve in value at all. 

The key is learning how to spot properties that will likely gain value as they age – or at least, gain more than other options on the market.

So how does one go about getting the biggest bang for their buck? What makes a good investment?

Principal of Michelle May’s Buyers Agents, Michelle May says you should leave your wishlist at the door and look at each property without emotion.

"You can’t attribute any extra value to a property because it has your dream kitchen or added storage. We’re simply looking to see if it’s a good investment,” says May.

RELATED: What is a home loan calculator, and how does it work?

While this approach may not come naturally to some, it’s vital to think of the big picture. When we’re in a housing moment like now when supply outstrips demand, it’s a buyer's market. Hopeful homeowners will seek out the most competitive properties on the street while others get left behind.

To counteract this, May advises to not just look at the property itself but the whole neighbourhood. Every neighbourhood is different, filled with a variety of pros and cons that need to be considered.

“Some things that negatively impact capital growth are properties on main roads, tight and inflexible floor plans, narrow frontages, a poor level of finishes throughout, bad parking options or strata teams with a poor history of success,” says May.

“On the flip side, properties that do well will be on a quiet street, close to amenities, and walkable to nearby attractions and green space. They will have a private outdoor area, excellent transport links and little to no development nearby.”

It may sound like wishful thinking, but these kinds of properties do exist. It just requires some careful research.

“The more you know, the more empowered you are to make better property decisions,” concludes May, “and in the current market conditions, that extra knowledge will put you ahead of the property-hunting pack.”

Ready to buy your dream home? Browse and compare a selection of competitive home loan interest rates below.

Last updated 13 April 2025 Important disclosures and comparison rate warning*
What are your home loan needs?
Loan purpose
Buying or Refinancing
  • Promoted

    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.74 % p.a.
    Variable
    Comparison rate
    5.65 % p.a.
    Initial monthly repayment
    $2,915
    Go to site
    • Built by CommBank
    • The first home loan with an increasing discount (conditions apply)
    • No application or banking fees
  • Promoted

    Basic Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Redraw available
    Interest rate
    5.39 % p.a.
    Fixed 2 years
    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,805
    Go to site
    • No ongoing fees
    • Free redraw from your loan using Macquarie Online.
    • No application or account management fees
  • Promoted

    Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.79 % p.a.
    Variable
    Comparison rate
    5.83 % p.a.
    Initial monthly repayment
    $2,931
    Go to site
    • No monthly or ongoing fees
    • Option to add an offset for 0.10% p.a.
  • Promoted

    Neat Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.84 % p.a.
    Variable
    Comparison rate
    5.86 % p.a.
    Initial monthly repayment
    $2,947
    Go to site
    • Free extra repayments
    • Easy redraw facility
    • No annual fee to pay
  • Promoted

    Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.78 % p.a.
    Variable
    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,927
    Go to site
    • $0 application fee to pay
    • Unlimited additional repayments
    • Apply in as little as 15 minutes
  • Basic Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 30% min deposit
    • Redraw available
    Interest rate
    5.39 % p.a.
    Fixed 2 years
    Comparison rate
    5.82 % p.a.
    Initial monthly repayment
    $2,805
    Go to site
    • No ongoing fees
    • Free redraw from your loan using Macquarie Online.
    • No application or account management fees
  • 2-Year Discounted - Simple Home Loan Variable

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Redraw available
    Interest rate
    5.49 % p.a.
    Variable for 24 months and then 5.74% p.a.
    Comparison rate
    5.69 % p.a.
    Initial monthly repayment
    $2,836
    Go to site
  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    Interest rate
    5.49 % p.a.
    Fixed 2 years
    Comparison rate
    5.91 % p.a.
    Initial monthly repayment
    $2,836
    Go to site
    • No ongoing annual fees
    • Make up to $25,000 extra repayments during a fixed period, fee free (T&Cs apply)
    • Lock in for up to 5 years.
  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • Interest only
    • 20% min deposit
    Interest rate
    5.49 % p.a.
    Fixed 2 years
    Comparison rate
    5.96 % p.a.
    Initial monthly repayment
    $2,836
    Go to site
    • Free extra repayments of up to $25,000 during the fixed rate period.
    • Split loan available
    • Weekly, fortnightly, or monthly repayment options
  • Discounted Complete Package Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.64 % p.a.
    Variable for 24 months and then 5.89% p.a.
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $2,883
    Go to site
    • 100% offset account
    • Make additional repayments at any time
    • Get a fee-free credit card (T&Cs apply)
Showing 9 results from 415 home loans. Use the filters to see more

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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.

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