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Home Loans - Compare Fees & Calculate Repayments

Popular

Home Loan Variable
Rate
Comparison
Rate
Introductory
Rate
Rocket Repay Home Loan Premier Advantage Package
$250,000 - $749,999
  • Bundle Westpac Financial Products with Premier Advantage Package
  • Wide Range of Features
  • Optional Linked Offset Account
5.08% 5.45%
1 Year Guaranteed Rate Home Loan
  • Introductory Discounted Rate Fixed for 1 Year
  • 100% Offset Account Available
  • For Small to Very Large Loan Amounts
5.90% 5.93% 4.79%(for 1 year)
Standard Variable Rate Home Loan Wealth Package
$250,000 - $499,999
  • Group CBA Financial Products with Wealth Package
  • Discount on CBA Standard Variable Rate
  • 100% Offset Account Available
5.10% Not available
Variable UHomeLoan
For refinance only
  • No Upfront or Ongoing Loan Fees
  • Unlimited Additional Repayments
4.62% 4.62%
Standard Variable Rate Home Loan
  • Wide Range of Features
  • 100% Mortgage Offset Account Available
5.90% 6.04%

View home loans from the following home loan lenders...

AMP Home Loans Commonwealth Bank Home Loans loans.com.au Home Loans RAMS Home Loans UBank Home Loans
Aussie Home Loans IMB Home Loans MyRate Home Loans St.George Home Loans Westpac Home Loans
Bank of Melbourne Home Loans ING DIRECT Home Loans NAB Home Loans Suncorp Bank Home Loans Yellow Brick Road Home Loans
Citibank Home Loans

A Quick Guide To Home Loans In Australia

If you're in the market to buy your first home, it can be a confusing and daunting time. With so many variations of loans being offered by many lenders, it can be tempting to just go for the loan that looks the cheapest.

There are many types of loans, and it's not always easy to get your head around the differences between them and which one is better suited to your needs - which is where we come in.

To get you started, here's a quick overview of the most popular types of home loans in Australia:

Variable Rate Loans:

The variable rate loan is the most popular home loan type in Australia. With this type of loan, the interest rate will rise and fall with the market. Variable rate loans usually fall into two categories: basic, 'no frills' loans, which are cheaper but offer a lot less flexibility and no extras; and standard loans, which usually allow options such as redraw, the option to split the loan between fixed and variable rates, and portability. Variable rate loans are suitable for all types of borrowers, from first-home buyers to refinancers and investors.

Fixed Rate Loans:

This type of loan locks in the current interest rate for a particular term - usually, one to five years - meaning that repayment amounts will be set for that period. At the end of the term, customers can lock in another rate, switch to a variable loan or split their mortgage into both fixed and variable. The obvious benefit of this is that you know exactly what your repayments will be for the fixed period, with no surprises if rates rise. However, if interest rates go down, you're stuck at a higher rate. Other things to be aware of are that fixed rates often lack the flexibility of variable loans, and some lenders will charge higher exit fees or even ban borrowers making extra repayments to get ahead. However, for consumers nervous about rate changes and perhaps not as great at budgeting for an increase in repayments, a fixed rate loan could be an attractive option.

No Deposit Loans:

While normally borrowers are required to save for a deposit before being approved for a loan, some institutions allow customers to borrow 100% of the purchase price of the property. However, these are much harder to come by post-GFC, especially through major lenders, and the lending criteria is extremely strict. These loans will usually require a friend or family member to act as guarantor (sometimes called a 'Family Equity' loan). Borrowers will also be required to pay mortgage insurance and other fees, so these types of loans are best suited to people with a very good and stable income and a flawless credit history who, for whatever reason, just don't have enough saved for a deposit.

Line of Credit (Equity) Loans:

This type of loan allows borrowers to use the equity in their home to finance other things such as renovations or to invest in other assets. Consumers usually need to have paid a large deposit or have a large amount of equity in their home for this to be a worthwhile option. The negatives are that these can work out to be more expensive than standard loans, and overall are best suited to people with strong budgeting skills who want to invest or renovate.

Introductory Rate ('Honeymoon') Loans:

These offer a lower interest rate for an initial period and are generally aimed at first-home buyers. The lower rate can either be a discounted fixed rate, or a set discount on a variable rate, which will move with the market. While they can be great for the period of the discount, they often feature snags such as a cap on extra repayments during the introductory period, and heavy penalties for borrowers wanting to exit the loan after the initial honeymoon period. These types of loans are usually only offered to new borrowers, and many people can fall into the trap of not preparing to meet repayments after the introductory period expires and rates go up.

Non-Conforming Loans:

These are loans specifically designed for consumers who don't meet the banks' strict lending criteria - those who are self-employed, have a bad credit history, are new migrants, casual or seasonal workers, or older borrowers nearing retirement age.

Construction Loans:

Borrowers who are building a home from scratch will benefit from this sort of loan - instead of a standard loan, in which the entire loan amount is drawn down at once, construction loans are drawn down in stages to reflect the building process. As borrowers don't need access to the full loan amount immediately, instead just paying off each stage of construction as it is completed, this saves paying unnecessary interest, as it's only calculated on the amount that has been physically drawn down. Once construction is completed, borrowers can switch to another type of loan to continue the repayments.

Interest Only:

Although most Australians opt for traditional loans in which the repayments consist of the principal and interest, interest only loans can suit investors who are looking to lower repayments and planning to sell the property on within a few years. Repayments only cover the interest on the amount borrowed, for a set interest-only period (usually one to five years). At the end of this period, borrowers can refinance to another loan or pay the principal in full, which is why these types of loans are favoured by investors purchasing their second or subsequent property.

Professional Packages:

If you're looking for more than just a no-frills loan, major lenders offer special packages to borrowers applying for larger loans (usually $250,000 or more). These packages include extras such as credit cards, offset and savings accounts, discounted insurance and discounts on variable rate home loans, fees and charges.

A quick home loan glossary

Consumers will come across a lot of jargon when they first start comparing loans and lenders. Here's a quick rundown of some of the most common terms;

  • Comparison rate: A rate that includes both the interest rate, and any fees and charges applicable during the length of the loan, expressed as a percentage of the loan amount.
  • Conveyancing: The legal process of transferring ownership of property.
  • Debt to service ratio: The percentage of your gross income that would be taken up by loan repayments. For single income earners, this is usually no more than 35%.
  • Drawdown: When the borrower accesses loan funds for the first time.
  • Economic costs: Fees that apply if a borrower changes loan details during a fixed period - such as switching it from fixed to variable, or prepaying the loan fully before the fixed period expires. The costs equate to the lender's estimated losses resulting from these changes.
  • Equity: The difference between the value of a property and the amount a borrower still owes on it.
  • Lenders Mortgage Insurance: Insurance obtained by a lender to protect itself if a borrower defaults.
  • Loan-to-Value Ratio: The total amount of a loan, divided by the value of the property after appraisal.
  • Margin: The difference between a lender's interest indicator rate, and the rate it charges to borrowers.
  • Offset Account: A savings account linked to your loan account, in which the balance can be used to reduce the loan principal. Borrowers will only pay interest on what they owe minus the balance of the offset account, meaning the loan can be paid off faster if repayments are made on the full borrowed amount.
  • Portability: The option to move the loan from one property to another, if a borrower sells their home and purchases another one.
  • Redraw Facility: Allows customers to make additional repayments to their loan, and then draw on these funds when needed.
  • Refinancing: Paying off an existing loan and establishing a new one.
  • Settlement: The completion of the process of selling or purchasing property.
  • Stamp Duty: A government tax calculated on a property's sale price, paid by the buyer.

Disclaimer:

To provide credit assistance means to either suggest that you, or assist you to, apply for, remain in, or increase your limit of a particular credit contract with a particular credit provider. WhistleOut are not suggesting that you apply for a particular home loan with a particular provider of those products, nor are we trying to assist you to apply for a particular home loan with a particular provider.

We recommend that you seek professional advice before acting upon or relying on any information provided on this web site, or provided by visiting any website which is linked to our website, by way of a link to the website. Should you decide to apply for a home loan after visiting our website, you will be dealing with the provider of that loan and not with WhistleOut.

Comparison Rates

WARNING: The 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.

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