What are the best home loan rates in 2021?

Looking to buy your first apartment or switch to a cheaper home loan this year? Given how much interest rates have fallen over the past 12 months, the general consensus is that 2021 could be a great year to tick off these goals.
The big question though, is what home loan rates should borrowers be looking for when shopping around? After three Reserve Bank cuts in 2020 which brought the official cash rate down by a massive 0.65%, what’s considered ‘low’ or ‘competitive’ has unsurprisingly changed a lot.
As a rule of thumb, you’re likely paying too much with a rate above 3.00%, considering that a big bulk of owner occupier home loans now start with ‘2’ and some even begin with ‘1’.
Top fixed rate home loans
Since the last RBA cut in November, a number of home loans have dipped below the 2% threshold - the majority being fixed rate offers. So while the 3-year fixed rate average for owner occupiers sits at 2.38%, Mozo data reveals you can lock in rates as low as 1.95% for that same term length.
Home loan | 3-year fixed rate^ |
UBank UHomeLoan (Fixed) | 1.95% (2.27% comparison rate*) |
CUA Fixed Rate Loan | 1.97% (3.86% comparison rate*) |
IMB Bank Fixed Home Loan | 1.97% (2.97% comparison rate*) |
QBank Fixed Rate Special | 1.97% (3.39% comparison rate*) |
Endeavour Mutual Bank Fixed Home Loan Sydney Mutual Bank Fixed Home Loan | 1.98% (2.76% comparison rate*) |
For shorter terms (1 or 2 years), the lowest fixed rate in the Mozo database starts even lower at 1.89%, although a couple of those deals are exclusively for first home buyers.
Home loan | 2-year fixed rate^ |
Tic:Toc Fixed Home Loan | 1.89% (2.15% comparison rate*) |
Endeavour Mutual Bank First Home Buyers 2 Year Fixed Rate (Special Offer) Sydney Mutual Bank First Home Buyers 2 Year Fixed Rate (Special Offer) | 1.89% (2.79% comparison rate*) |
Reduce Home Loans Home Owners Dream Fixed | 1.94% (2.59% comparison rate*) |
QBank Fixed Rate Special | 1.97% (3.54% comparison rate*) |
bcu Fixed Rate Home Loan | 1.98% (3.77% comparison rate*) |
Top variable rate home loans
What about if you want a mortgage with more repayment flexibility and other perks like an offset account? Then variable rate loans may be a better place to look.
Although the past year has seen fewer lenders make moves on variable rates than fixed rates, the variable rate average has nonetheless dropped by 41 basis points since December 2019.
For borrowers who’ve either saved up the standard 20% deposit or built at least 20% in home equity, here are the current variable rate leaders in our database - all of which sit substantially below the average of 3.31%.
Home loan (up to 80% LVR) | Variable rate^ | Does it have an offset account? |
Reduce Home Loans Super Saver Variable | 1.99% (2.05% comparison rate*) | No |
Pacific Mortgage Group Standard Variable Home Loan | 2.09% (2.09% comparison rate*) | No |
Homestar Star Essentials Home Loan | 2.14% (2.19% comparison rate*) | No |
Homestar Variable Rate Loan | 2.14% (2.19% comparison rate*) | Yes |
FreedomLend Variable Home Loan | 2.17% (2.17% comparison rate*) | Yes |
Well Home Loans Well Balanced | 2.17% (2.20% comparison rate*) | Yes |
To make sense of these rates, let’s do the maths. Say you’re borrowing $700,000 over 25 years. According to our home loan repayments calculator, refinancing from the average variable rate (3.31%) to the lowest in our database (1.99%) could cut down your interest costs by $140,960 over the life of the loan.
Top low deposit home loans
Domain’s First Home Buyer Report last September found that it took first home buyers in Sydney a whopping six years and six months to put together a 20% house deposit.
If you can’t afford to wait that long - especially amid forecasts that property prices are set to rise further this year - then chances are you’re considering a low deposit home loan instead. That’s a loan for borrowers with a deposit less than 20% or a loan-to-value ratio (LVR) above 80%. The catch though is, you’ll end up paying more in interest and monthly repayments.
That’s not to say you’re entirely shut from competitive rates. Here are the best home loan rates at 95% LVR (i.e. for borrowers with a 5% deposit) in our database.
Home loan (up to 95% LVR) | Interest rate^ | For first home buyers only? |
Illawarra CU Bare Essentials First Home Owners Special Offer | 2.45% (2.50% comparison rate*) | Yes |
Illawarra CU The Works Package Intro Special Variable Home Loan | 1.99% for 2 years, then 2.50% (2.93% comparison rate*) | No |
BankSA Basic Home Loan Special Offer | 2.54% (2.56% comparison rate*) | No |
Bank of Melbourne Basic Home Loan Special Offer St George Basic Home Loan Special Offer | 2.59% (2.61% comparison rate*) | No |
G&C Mutual Credit Union First Home Loan Premium (Package) | 2.64% (2.65% comparison rate*) | Yes (must be eligible for First Home Loan Deposit Scheme) |
Just beware that if you have a small deposit but no guarantor (either your parents or the government under the First Home Loan Deposit Scheme), then you may have to pay Lenders Mortgage Insurance, which could amount to thousands of dollars.
Your next steps
Now that you have a clearer idea of what home loan rates you should be aiming for, it’s time to shop around!
Get started with a few competitive options below, or visit our home loans comparison hub for even more offers from over 80 different lenders.
Compare low rate home loans - last updated 9 December 2023
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2023
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.74% p.a. variable5.65% 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.
CompareCompareUnloan Variable
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.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% p.a.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
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Home Variable Rate
Owner Occupier, Principal & Interest, Refinance Only
interest rate
comparison rate
Initial monthly repayment6.15% p.a. variable6.15% p.a.Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.
CompareCompareHome Variable Rate
Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.15% p.a.
- interest rate
- 6.15% p.a. variable
- comparison rate
- 6.15% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - up to $30,000
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Up Home Variable Rate
-
Mozo experts choice awards won:
- Packaged Home Loan - 2023
Variable Rate Home Loan Special Offer
Package, Owner Occupier, Principal & Interest, LVR<80%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.51% p.a.Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
CompareCompareVariable Rate Home Loan Special Offer
Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- Upfront fees
- $0
- Ongoing fees
- $395.00 yearly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $0 package fee for the first year.
Read our Mozo Review to learn more about the Credit Union SA Variable Rate Home Loan Special Offer
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Mortgage Simplifier
LVR<80%, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.43% p.a.Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.
CompareCompareMortgage Simplifier
Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.43% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.43% p.a.
- Upfront fees
- $299
- Ongoing fees
- $0.00
- Discharge Fee
- $250.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the ING Mortgage Simplifier
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2023
Unloan Variable
Investment, Refinance Only
interest rate
comparison rate
Initial monthly repayment6.04% p.a. variable5.95% p.a.For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply in as little as 10 minutes.
- interest rate
- 6.04% p.a. variable
- comparison rate
- 5.95% p.a.
- interest rate
- 6.04% p.a. variable
- comparison rate
- 5.95% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
^Rates drawn from the Mozo database, accurate as of 13 January 2021.
* 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.