Compare Australia’s best home loans

A home loan is an amount of money that you borrow to finance the purchase of a property.

A home loan works in a similar way to any other loan. You borrow an amount of money to fund the purchase of a property or land and you pay that money back (principal), plus interest, over a period of time.  

There are a range of different factors that determine the repayment amount.

• Loan term. In Australia the typical loan term for a mortgage is 25 to 30 years but you can have a loan term for less than this.  
• Interest rates: borrowers have a choice between fixed and variable interest rates for home loans or a split home loan where a portion of the loan is fixed and the other portion is variable. Fixed rate loans are usually available for terms between 1-5 years.   
• Repayment frequency. The standard home loan repayment is made monthly, but many lenders also offer weekly and fortnightly options.   

Type of repayment. For owner occupier home loans the standard repayment type is principal and interest (P&I). There is also an interest-only (IO) repayment structure, where you only pay back the interest you are charged. This is a popular option for investment loans. 

There are two types of home loans: owner-occupied and investment home loans. 

• Owner-occupied home loans are for borrowers who intend to live in the home they are buying (in other words, a property occupied by the owner). 
• Investment home loans are tailored towards property investors who intend to rent out the properties they purchase to tenants.

A comparison rate represents the ‘true’ cost of a home loan by wrapping the interest rate, fees, and charges of a particular loan into a simplified percentage figure. This makes it easier to compare home loan costs from different lenders.

Learn more about how comparison rates are calculated.

There isn’t a single best lender for everyone but there will be a best home loan for you.  While the Big 4 banks (ANZ, CommBank, NAB and Westpac) are the biggest mortgage lenders in Australia they do not always have the best rates. You can use our comparison tool above to compare all home loans in our database and shortlist ones that have the best rates and features for your needs. 

Each year we also conduct a review of the home loan market for the Mozo Experts Choice Home Loan Awards. For this year’s awards we compared 444 home loans from 97 lenders. We run a number of scenarios across 10 categories to find the home loans that deliver the best value for Australian borrowers. 

The standard deposit for a home loan in Australia is 20% of the value of a property. It is possible to buy a home with a deposit of less than 20% by using government schemes, such as the First Home Guarantee scheme, and by opting for a low-deposit home loan and paying Lender’s Mortgage Insurance. 

The interest on your home loan is calculated daily, based on your outstanding balance. Read our guide on calculating interest on a loan for more information.

LVR stands for loan-to-value ratio. This is the amount you borrow, expressed as a percentage of the value of the property you buy. For example, if you borrow $500,000 and you have a deposit of $100,000 your LVR will be 20%.

When you first apply for a loan, your LVR is determined by your deposit size. The higher your deposit is, the lower your LVR will be. But your LVR can also change over time, as you pay off more of your home loan, or as your property value goes up and down.

Some lenders will have low deposit home loans and Lenders Mortgage Insurance (LMI) is an insurance product that allows you to get a home loan without a full 20% deposit. The cost of this insurance is usually added to your home loan amount and it is designed to protect your lender financially in the case of a default. See our guide on the difference between LMI and mortgage protection insurance. 

Home loan interest is not tax-deductible for owner-occupiers. However, property investors can claim interest as a tax deduction if they have an investment home loan. 

An offset account is a transaction account that allows you to reduce how much interest you’re charged. You won’t pay interest on your loan balance equal to the amount of money you hold in your offset account. 

For example, if you have a $500,000 home loan debt and $50,000 in your offset account, your home loan interest will be calculated on just $450,000. 

Read our guide on how offset accounts work for more information.

A home loan redraw is when you withdraw extra repayments you’ve already made on your home loan to use the money for another purpose. Depending on the lender, sometimes there is a redraw fee or minimum redraw amount required. Learn more about home loan redraws.  

Home loan pre-approval is when a lender approves you as a suitable candidate for a home loan and indicates how much it’s willing to let you borrow – subject to conditions.

The purpose of getting pre-approval is to understand how much you can feasibly borrow to buy a property, and by setting a budget, it helps you go house hunting with some confidence.

The key information lenders will need for a home loan application is:

• Identification documents 
• Income details 
• Expenses 
• Assets
• Details of the property (if you’ve already found one)

The great news about digital home loans is that applying online reduces the time it takes to get approval. Depending on the lender it can take as little as a few hours to a few days to get pre-approval (assuming you have all the information required to process the application). Full loan approval through to property settlement can take approx 4 -6 weeks. 

The standard loan term for a home loan is 25 years, though many lenders offer home loans for terms up to 40 years. 

It is important to get the shortest loan term you can afford. The longer the loan term the more interest you’ll pay, but the lower your regular loan repayment will be. The shorter the loan term, the higher your regular repayment but you’ll pay less in interest.  Use our mortgage repayment calculator to see what the difference in repayments will be between different loan terms. 

A mortgage broker is a go-between who can help borrowers arrange home loans through banks and lending institutions. 

A mortgage broker can help:

• Calculate how much you can afford to borrow. 
• Compare home loan options best suited for your goals and budget.
• Walk you through how each home loan works, plus associated costs like interest, fees, and features. 
• Apply for a home loan on your behalf and oversee the settlement process. 

Mortgage brokers tend to receive commission payments from lending institutions, so you usually won’t have to worry about paying them (though some mortgage brokers may charge service fees). See information about the role of mortgage brokers.