What features to look for in a cheap home loan

By Cameron Thomson · · 2 min read
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women looking for a cheap home loan with good home loan features, home with lots of money

Are you a new home buyer looking for a home loan provider that offers the cheapest loan? A cheap home loan might be one that offers low rates and fees, but it isn’t the only thing you should be looking for. 

For instance, some home loan features can actually help you with your interest rate as much as or more than a lower rate. Here at Mozo, we’ve made a handy little explainer on what features you should look out for when it comes to finding a cheap home loan. 

Which home loan features to keep in mind

There are a lot of moving parts when it comes to home loans, so it can be difficult to know what to look out for. However, when hunting for a cheap home loan, a good idea is to keep in mind a couple of key features.

One that’s particularly useful for a borrower to have is free extra repayments. Basically, by being able to make extra contributions to your loan, you’ll reduce the amount of interest you pay and the length of your loan—thereby making it cheaper over the long term too!

Another helpful feature to have alongside free extra repayments is a redraw facility. Basically, any extra contributions you make above the minimum are available for you to redraw from the loan amount. 

However, do keep in mind that redraw facilities will usually have a minimum and sometimes maximum redraw amount. You may also be restricted to a set period of time you can actually redraw your extra repayments.

Home with money

Similar in function to redraw facilities, offset accounts are one feature that you should also consider when getting a low-cost home loan. Offset accounts work a lot like savings accounts, except that they reduce the interest on your home loan rather than earning you interest on your savings.

Unlike a redraw facility, an offset account also acts like an everyday banking account—so you can deposit and withdraw money whenever you need it. Just keep in mind that whenever you take money out of your account, your interest owed on your loan will also rise.

So, now that you know some of the features to look out for in cheap home loans, there’s one last thing to consider—how do you make sure that you’re actually getting a cheap home loan? 

Utilising a comparison site like Mozo is one way you can compare cheap home loans so that you know you’re getting the loan with the lowest rates and fees. At Mozo, our database lets you compare hundreds of home loan providers so that you can get the loan that works best for you.

Home loan comparisons on Mozo - last updated 8 December 2023

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
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    Initial monthly repayment
    6.15% p.a.
    6.15% 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.

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    Unloan Variable

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    Initial monthly repayment
    5.74% p.a.
    5.65% 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.

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    Variable Home Loan 90

    Principal and Interest, LVR <90%

    variable rate
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    Initial monthly repayment
    6.04% p.a.
    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. Advertised rates include Nov RBA rate increase. T&Cs apply.

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  • Mortgage Simplifier

    LVR<80%, Owner Occupier, Principal & Interest

    variable rate
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    Initial monthly repayment
    6.14% p.a.
    6.43% 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.

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  • Well Balanced Special Offer

    Owner Occupier, Principal & Interest, LVR <80%

    variable rate
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    Initial monthly repayment
    6.12% p.a.
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* 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

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