Home loan features up close: How to choose

Man doesn't know how to choose a home loan

If purchasing a home outright isn’t something you can do - perhaps because you’re not Jeff Bezos - you’re probably thinking about getting a home loan

But finding the right one can be hard when there are a plethora of options out there. After all, different lenders tend to have different terms set out on home loan products.

However, many actually share features in common, and it’s good to know what they are. So let’s go through them together. 

What standard features are found in home loans?

Woman inspecting mortgage loan for a home

While some lenders may have extra conditions that are specific to them, here are a few common features that can be useful to know when reviewing your home loan options:

1. Interest rate

This is what you will pay on top of your loan as an annual percentage. This rate will affect the total amount payable and potentially the time it takes to settle your loan, especially if you have a high rate on an ongoing basis. A lower interest rate will mean lower repayments, generally speaking, and the lower your loan total the less time it will conceivably take for you to cover this debt.  

2. Fees

There are also fees you might need to budget for. They tend to be things like application fees, establishment fees, valuation fees, and ongoing account fees. It’s possible that when closing your account, you might also have to factor in a discharge fee.

3. Loan duration

This is how long you will be paying off your loan for. The length of time is subject to your monthly repayments and indeed the overall terms of your loan.

4. Offset accounts

An offset account links your everyday account to your home loan. Keeping money in there helps because it means you only pay interest on the balance. For instance, if your loan is $500,000 and you deposit $10,000 in the offset account, you would pay interest on the $490,000. The interest you don’t pay by factoring in these deposits can save you money in the long run.

As an offset functions similarly to an everyday account, you might even get a debit card and be able to deposit and withdraw money at your convenience. 

5. Extra repayments

You can make free extra repayments if your home loan provider allows it. Doing so will result in a smaller loan amount for interest to be charged on - and possibly your overall mortgage being paid off quicker. 

6. Cashback rewards

In some instances, you can get a cashback reward if you accept a lender’s offer to refinance your home loan with them.

These are just some features you might expect to find in a home loan offer. They can affect how much you pay in the long term. So, finding the right product might be key to saving some extra cash at the end of the day!

And on that note, let’s briefly cover some of the top home loan options you might like to know about. 

Best home loan products in 2023

Man running away with the best home loan rate

At Mozo, our team of expert data analysts and researchers have determined the top home loan products this year. Take Bendigo bank, for instance, deemed the best home lender of 2023: its Express Home Loan has an interest rate of 5.47% p.a., a settlement fee of $250 and a $10 monthly service fee.

Meanwhile, by comparison, Loans.com has a higher interest rate at 5.60% p.a. with its Variable Home Loan 70. Its loan comes with no loan application fees, but the valuation and settlement fee are $300 respectively. 

Finally in our list of examples here, the Macquarie Basic Home Loan has a rate of 5.29% p.a., and comes with a $350 upfront fee and a $400 discharge fee. Notably, it was also picked as the top loan by 4,000 Austalians surveyed by us for our Mozo Expert Choice Awards. 

So every home loan has its strengths and weaknesses. Choosing the one that’s right for you involves reviewing what’s available in the market, while also factoring in your situation. 

Don’t know where to start on home loans?

That’s okay! Find the home loan that meets your needs by comparing below. You can also crunch the numbers between your top picks with our home loan comparison calculator.

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 473 home loans.
Last updated 22 June 2024 Important disclosures and comparison rate warning*
  • 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.

  • Variable Home Loan 90

    Principal and Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.04% p.a. variable
    6.06% p.a.

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • The Better Home Loan Special Offer

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.14% p.a.

    Enjoy a variable rate home loan with a bunch of features from Police Credit Union. Make extra repayments at any time without penalty. No monthly, annual or upfront fees. Free online redraw. Minimum 20% deposit. Qualifying criteria applies. Minimum loan amount is 200K. For new customers only. Mozo Experts Choice Home Lender Credit Union of the Year 2023.

  • 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^


* 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.