There is an easy way to potentially save thousands on your home loan, but surprisingly, most Aussies ignore it. Four in five borrowers take out a home loan with a Big 4 bank, instead of shopping around for cheaper loan. This mistake is costing us big time.
Research from Mozo reveals that the difference between the cheapest home loan rates from the big banks and online lenders can be $18,011 on a $400,000 home loan over 30 years. Why the difference? Well for starters, online lenders have lower costs than bricks and mortar banks so they can pass these savings onto borrowers in the form of lower interest rates and fees.
Right now, you can compare online lenders on Mozo with rates starting from below 3.50%. So, if you'd like to compare and see if you can save, read on for our run down on five of the top online loans on the market right now.
Top Online Home Loans
loans.com.au Smart Home Loan 80
New 2.88% variable rate (2.90% comparison rate*)
Unlimited free extra repayments and redraw facility
Aussie owned loans.com.au has been offering up simple, low rate home loans since 2011. This wallet-friendly option is the perfect no-fuss mortgage, with all the features you want and none you don’t - you can make unlimited extra repayments and make use of the redraw facility, without paying a premium for bells and whistles like an offset account. If you’re borrowing $1million or less and have at least a 20% deposit saved up, the Smart Home Loan might be the mortgage for you.
As one of the top online banks in our database, UBank has our seal of approval when it comes to offering Aussie borrowers the best bang for their buck. Why? Well, for one, with no fees, a low interest rate and plenty of flexible payment options, the UHomeLoan Discount Offer is pretty hard to argue with. 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. It’s available for loans of $200,000 or more, with a 20% deposit.
If you want to save thousands on your mortgage, then Homestar might just be your lender of choice. This hugely popular Australian non-bank lender has been offering low-cost home loans since 2004, and the Star Essentials home loan is no exception. With one of the lowest variable rates on the market plus no ongoing fees, this great value loan also comes neatly packaged with a number of great features including unrestricted extra repayments and free online redraws.
*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 the amount and term you entered.
**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. 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.