The magic home loan number you need to know

By Kelly Emmerton · · 2 min read
Fact Checked
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We talk a lot about how important it is to find a great home loan deal, but do you really know what that means?

New research from the home loan comparison experts at Mozo reveals that 3.70% is the new benchmark for home loan rates, so if your rate is higher than this, you could be paying too much interest.

Despite the fact that half the lenders in the Mozo database currently offer an owner occupier rate at or below the magic number, many Aussies are still paying too much on their mortgage, with the average rate sitting at a steep 4.35%.

“By being on the lookout for more competitive rates under the 3.70% benchmark, borrowers have the potential to save thousands of dollars a year on their home loan,” says Mozo Director, Kirsty Lamont.

Snag a low rate home loan today - last updated 20 April 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Featured Product
    Mozo Expert Choice Badge
    Unloan Variable

    Owner Occupier, LVR <80%

    variable rate
    comparison rate
    Initial monthly repayment
    5.99% p.a.
    5.90% p.a.

    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 online in minutes.

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  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    6.15% p.a.
    6.40% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

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  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    variable rate
    comparison rate
    Initial monthly repayment
    6.01% p.a.
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    variable rate
    comparison rate
    Initial monthly repayment
    6.14% p.a.
    6.16% p.a.

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

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  • Basic Home Loan

    Owner Occupier, LVR 60-70%, Principal & Interest

    variable rate
    comparison rate
    Initial monthly repayment
    6.15% p.a.
    6.17% p.a.

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 30% Deposit required.

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    Details
  • Flex Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    variable rate
    comparison rate
    Initial monthly repayment
    p.a.
    6.37% p.a.

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

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  • Elevate

    Owner Occupier, Principal & Interest, <80% LVR

    variable rate
    comparison rate
    Initial monthly repayment
    6.09% p.a.
    6.20% p.a.

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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Crunching the numbers

On a $300,000 home loan over 30 years, the difference between the cost of the average home loan rate and the lowest in the Mozo database is $59,276 - a considerable chunk of change for a household to save*.

“There’s potentially tens of thousands of dollars in savings up for grabs for those who take the time to shop around and find a great deal,” said Lamont.


Tips for choosing a bargain home loan rate

  • Check the comparison rate. One really handy tool when trying to decide what the best value loan for you is, is the comparison rate. This rate takes into account both the interest and guaranteed fees on a loan, to give you a more accurate idea of the ‘true’ cost of a loan and help you compare your options on even footing.

  • Decide what you really need. Many home loans come with a bunch of handy features like free extra repayments and offset accounts which can save you a tonne of money on interest. The downside is that full feature home loans often have more fees or higher interest rates attached. So it’s worth working out exactly what features you’ll use and look for a home loan to suit, so you’re not paying for extras you don’t use.

  • Compare your options. An easy way to compare a heap of home loans from a wide array of lenders is to use our home loan comparison table. Or, if you’re refinancing, take our Switch and Save calculator for a whirl to find out how much a better deal could save you.

*Based on a $300,000 loan over 30 years, 80% LVR, principal and interest repayments. Lowest rate in the Mozo database is 3.49% from Reduce Home Loans.

* 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.