Expert advice on home loan tips (and traps)

couple-sitting-on-cough-comparing-home-loans

As Australians rush to get into the property market and take advantage of the low interest rates currently on offer, it’s hardly a surprise that new home loans are being taken out at record levels.

But hold on a moment, because we’re not talking about a small loan here - we’re likely talking about a loan in the six figures that you’ll be paying off over multiple decades! That’s why a bit of research and some extra knowhow could really pay off.

So whether you’re a first home buyer, a budding investor or an existing home owner looking to refinance, here are a few tips and traps from the Mozo experts you’ll want to keep in mind when you’re comparing home loans.

Expert home loan tips

1. Take advantage of low rates: Home loan rates are currently at some of their lowest points in years, but not all lenders are offering the same deals. To score a super low rate, you may need to look beyond the major banks to an online lender or challenger bank.

2. Make the most of features: Many loans come with features like offset accounts, redraw facilities and extra repayments. If you like the idea of paying off your loan faster, reducing the interest you pay or just having some extra flexibility, these features may be worth utilising.

3. Weigh up a fixed vs variable rate: Looking for repayment certainty? A fixed home loan which allows you to lock in a rate for several years may be ideal. Conversely, a variable rate may give you added flexibility and a more extensive range of features. Otherwise for the best of both worlds, many lenders allow you to split your loan into fixed and variable portions.

Home loan traps to avoid

1. Beware revert rates: Plenty of borrowers are locking in fixed rates while they’re low, but one thing to watch out for is the revert rate you’ll pay after the fixed period. These are often far higher, so it may be worth comparing your options before the fixed period ends or renegotiating with your lender.

2. Watch out for ongoing fees: Most lenders charge one-off upfront or discharge fees, but there are also ongoing costs like annual services fees which can really add up over time. That’s why comparison rates (which take rates and fees into account) are a handy guide.

3. Loyalty doesn’t pay: If you’re aiming to keep your rate as low as possible, loyalty to your lender is unlikely to be your best tactic. Many lenders don’t pass on their best rates to existing customers, which means your rate could get less competitive over time. So make sure you regularly review your offer and, if you’re not happy, don’t be afraid to switch!

Compare home loans - last updated 26 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    6.25% p.a.
    fixed 3 years
    6.20% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Compare
    Details
  • Discount Variable Home Loan

    Owner Occupier, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

    Compare
    Details
  • Discounted Home Value Loan

    Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.09% p.a. variable
    6.09% p.a.

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

    Compare
    Details
  • Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% p.a.

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

    Compare
    Details

* 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

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.