Compare Loans for Australia

Home Loans Compared
Provider Account Name Min Rate Min Comparison Min Term Max Term Application Fee Balance
Minimum Rate
4.74% p.a.
Minimum Comparison
5.13% p.a.
Minimum Term
1 year
Maximum Term
30 years
Application Fee Balance
$600
$0 with Advantage Package
  • This competitive variable rate home loan gives you a 1.00% discount on standard variable rate. You can also access a full interest offset by linking the funds in your transaction account against the balance of your loan.

Home Loans Explained

Many people cannot afford to pay for a new house outright and instead borrow money from a bank in the form of a home loan in order to complete their purchase. The main thing to check when comparing home loans is the interest rate, though there are a number of other things that should be considered. There are many types of home loan products on the market designed to suit people in different situations.

Standard Variable Rate Home Loans

Standard variable rate home loans are loans that have a floating rate of interest that move in line with the official rate of interest set by the Reserve Bank of Australia. These are suitable for borrowers who believe that interest rates are likely to fall because obviously lower interest rates mean the cost of the loan also falls.

Fixed Rate Mortgages

Fixed rate mortgages or table loans are the most common type of home loan because it lets borrowers make regular repayments every week or month, Whilst the borrower does get certainty, they will not benefit from lower interest rates should rates fall. It should be said that should rates rise, then they do not have to pay higher rates either.

Interest-Only Loans

Interest-only loans allow the borrower to defer repayment of the principal amount for a specified period of time and only make the interest payment during the interim. It is expected that a repayment loan is taken out at a later date or that the principal is repaid in a lump sum.

Reducing Balance (Non-Table) Loans

Reducing balance (non-table) loans structure higher payments at the beginning of the repayment period which fall over the lifetime of the loan as the interest and principal amounts decline.

Revolving Credit Loans

Revolving credit loans operate like large overdrafts, in order to reduce the amount of interest payable it is best to keep the balance of the loan as low as possible by crediting salaries in the loan account and using the account to pay for things as they arise.

Offset Home Loans

An offset home loan links the loan to what is called an offset bank account, so the interest earned on your savings offsets the interest payable on your home loan. When the mortgage lender calculates the interest owed on the mortgage, the balance held in the offset account is deducted from the amount owed as mortgage and then the interest is calculated.

For example a borrower with a $250,000 home loan and a $50,000 balance held in the offset account will see the latter deducted from the former, and interest calculated on $200,000.

The big advantage with offset home loans is they allow the borrower to pay off the debt much faster than would otherwise be possible. So long as the borrower keeps depositing money in their offset account as often as possible and maintain the highest balance they can for the longest period of time, they will see will pay down the debt much faster than a regular home loan.

Offset home loans tend to attract both additional fees and higher interest rates. So a calculation has to be made by the borrower on how much balance they think they can hold in the offset account to make the offset home loan worthwhile.

Latest Compare Loans News from the comparedinkum Blog

Interest-Only-Borrowers Could Be In For A Hard Time

If you are interest-only-borrower, then you have had a difficult year. Not only has APRA cracked down on these kinds of loans but according to the latest research from Morgan Stanley, interest-only-borrowers are more likely to make poor financial decisions and pose a risk to their lenders. The research suggests that interest-only-borrowers have a higher chance of descending into debt and losing their savings if a high cost emerges. They are also likely to sell their property if interest rates rise which means they carry a high financial risk. Continue reading

Australian Banks Starting To Cut Fixed Interest Mortgage Rates

Many Australian banks have hiked rates on their interest-only loans recently, however that trend seems to be reversing with CBA joining a group of banks and cutting fixed rates on interest-only loans. The cut in interest rates applies only to CBA’s Fixed Wealth Package and Fixed Rate Home Loan products for both owner-occupiers and investors. Recently ANZ also cut its two-year fixed rate on interest-only loans by 10 basis points. The lender also increased the rate for principal and interest loans. Continue reading

Banks Cut Home Loan Rates

A number of banks have cut their headline mortgage rates for fixed and variable home loans for owner occupiers in advance of what is expected to be an extremely busy season for the property market this spring. For customers seeking out a low rate variable home loan, the biggest changes last month came from Greater Bank which slashed its rate by 15 basis points to 3.84%. Bank of Queensland followed suit by cutting its rate by 10 basis points to 3.79%. Continue reading

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