Spring property buyers: Why your home loan choice is as important as your new address


The spring property season is already underway and this year there seems to be a renewed sense of optimism among buyers.

Whether it’s because of price drops in major cities like Sydney and Melbourne, or just the result of pent up demand, buyers seem to be preparing themselves to enter the market this spring - particularly first-time buyers. 

According to the latest ABS figures released last month, first home buyer loan commitments increased by over 14% in July (seasonally adjusted), making up 32.5% of all owner occupier commitments. 

First-time buyers, upsizers, downsizers - whoever the buyer - their number one priority is likely going to be finding a home that ticks all the boxes in terms of price, location and the features of the property itself!

However, the vast majority of buyers also need finance. And while it might not be as exciting as visiting different open homes, putting the effort into comparing home loans can be seriously important for a number of reasons.

1. It could affect the deposit you need

You need a 20% deposit to get a home loan, right? 

It’s certainly true that the majority of banks require borrowers to take out lenders mortgage insurance (LMI) if they’ve got a deposit lower than 20%, but borrowers willing to shop around will be able to find plenty of loans available for deposits as low as 10% or even 5%. 

True, LMI can be a substantial additional cost, plus a larger loan will obviously mean that borrowers will need to be able to make larger repayments. However, a low deposit home loan may also allow buyers - notably first home buyers - to get into the market sooner. 

2. You could miss out on useful features

A lot of buyers simply focus on finding a loan that will let them buy a home. That’s fair enough, but there’s no reason why you can’t grab a mortgage with a great rate and useful features too, which may come in handy over the long run.

Want to reduce the amount of interest you're paying on your loan while still having access to that cash funds in case? An offset account could be just the feature for you. What about the ability to pay off your loan faster via extra repayments? 

Not every lender offers home loan features such as an offset account, redraw facility or split loan function, or the ability to make extra repayments. Yes, there may be extra costs associated with them but they’re certainly worth considering when comparing loans.

3. You could save yourself tens of thousands of dollars

It’s no joke. Depending on the interest rate and size of the mortgage, the difference in the amount of interest you pay over the life of the loan could be huge.

Take this example where Luke and Emma take out a $400,000 home loan which will be paid off over the next 25 years. Here’s the difference in interest repayments over the life of the loan using the average variable rate currently in the Mozo database (3.33%) and one of the lower rates on the market:

  • 3.33% variable rate: $189,863 total interest paid
  • 2.50% variable rate: $138,340 total interest paid

That’s a difference of $51,523 over that 25-year period, and it just goes to show the potential savings borrowers can make by comparing home loans. 

RELATED: Lenders slash rates as spring property season heats up

Ready to compare the latest rates on the market? Our handy home loan comparison tables make it easy to compare offers from a range of lenders side-by-side on everything from rates and features to fees.

Compare home loans - last updated 13 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Variable Home Loan 70

    interest rate
    comparison rate
    Initial monthly repayment
    3.10% p.a. variable
    3.12% 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 30% deposit required.

  • Unloan Variable

    Owner Occupier, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    3.14% p.a. variable
    3.06% p.a.

    For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.

  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    3.79% p.a. variable
    3.79% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.


* 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, loan amount and term entered. 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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