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Australian home loans in December 2024
Home loan rates are getting cheaper (well, some anyway)
Sean Callery
Editor
The good news for borrowers is that home loan rates are getting cheaper. The not-so-good news is that it’s generally only fixed rates that are coming down for now. You can now get a 3-year fixed rate home loan starting with a 4. That’s only one product from a relatively obscure lender (SWS Bank), but major banks and many other lenders have also been lowering their fixed rates. The trouble is fixed rates aren’t exactly popular right now, and people with an existing fixed loan don't benefit. We’ll likely need to wait longer for variable rates to come down, triggered by whenever the Reserve Bank of Australia lowers the cash rate. This will likely be in 2025, but experts are split on exactly when.
Mortgages in Australia by the numbers
Average new home loan
$642,121
Total value of new home loans issued per month
$30.08 billion
Australian homeowners who switch their mortgages each month
30,000+
Lowest home loan rates from
4.99% p.a.
Average monthly repayment (over 30 yrs)
$3,972
Australians who use a mortgage broker for their home loan
74%
Applying for a home loan
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Crunch the numbers on your home loan
Find out what a new home loan or refinance could mean for you finances.
Choosing the right home loan
How do I get the best home loan rate?
The biggest factor that determines your home loan rate is your loan-to-value ratio (LVR). This is your home loan as a percentage of the property you're buying. If you have a low LVR, you'll generally qualify for the cheapest home loan rates. Work out your LVR and then shop around multiple lenders to get the lowest rate you can.
How do I minimise fees?
The best way to avoid home loan fees is to shop around. Just remember that it may be worth paying a slightly higher one-off fee if it means you get a lower rate on your home loan. Interest costs generally outweigh fees over time. It's always worth asking the lender if they will waive the up-front fee.
Is offset better than redraw?
Two of the more popular home loan features are an offset account and redraw facility. An offset account is a transaction account linked to your home loan where every dollar deposited reduces the balance of your loan when interest is being calculated. A redraw facility means you can make extra repayments on your home loan and withdraw them again later if you need the money.
Both features have advantages and drawbacks, with an offset home loan generally giving more flexibility but potentially costing more. Read more about deciding between offset and redraw.
Should I use a mortgage broker?
This is entirely up to your own preferences. A mortgage broker can help you understand your borrowing power, compare loans, and will recommend options that match your needs. They can also help with your application when you're ready to apply. But it's possible to compare home loans and apply directly with a lender, without the help of a broker. It generally comes down to how confident you are comparing loans and taking care of the application admin by yourself.
Looking to refinance?
Everything you need to know about refinancing your home loan.
Refinance To New Rate Calculator
Find out the impact of interest rate changes on your repayments.
Top refinance FAQs
How do I refinance my home loan?
Refinancing your home loan means switching your loan to a different product or lender, or increasing your loan size. For example, you might switch from a variable to a fixed rate loan with your current lender, or stay with the same lender and increase your loan balance. Alternatively you could do the same but with a different provider.
If you’re increasing your loan amount, the lender will generally carry out a credit assessment, even if you’re staying with your current provider. They do this to ensure you can afford the repayments based on the higher loan balance. The lender will usually also arrange for your property to be valued.
If you ’re switching lenders to get a better deal, the new lender will treat your application much like they would if you were buying a property for the first time. That means they will assess your financial situation, borrowing capacity and get your property valued.
Once you’re approved, refinance home loans work just like any other kind of mortgage product.
What does it cost?
There are several potential costs to factor in if you refinance your home loan. You’ll have most of the same costs as you did when you got your loan initially (e.g. establishment fee and valuation fee), as well as a discharge fee charged by your old lender. Overall, expect to pay between $500 - $2,000.
If you’re staying with the same bank the cost of refinancing is generally lower and may even be nothing if it's a straightforward product switch.
Some lenders have home loan cashback offers for new customers, which could help offset the cost of switching if you're eligible.
Is it easier to refinance with a mortgage broker?
Refinancing with a mortgage broker may save you some time, as the broker does a lot of the work for you. It can also be less of a hassle to have an expert do the research for you and simply present you with deals that are better than your current one. Your broker can also negotiate on rates and fees with your existing lender and any new ones you’re considering to make sure you’re getting the best deal possible.
If you decide to go ahead with the switch, your broker will also help with your application and any other paperwork required.
How long does refinancing take?
This depends on the type of refinance. If you’re simply switching to a new product with your current lender without increasing your loan amount, this process can be completed in days. If you’re applying with a new lender or borrowing more with your current one, that process could take between 2-6 weeks depending on how complex your application is.
Thinking about cash out?
If you have available equity in your home, you may be borrow more with a cash-out refinance loan.
Help me buy my first home
Frequently asked questions for first home buyers.
What is a mortgage?
A home loan or mortgage is used to finance a home or investment property. Home loans are usually 'secured' against the property you're buying. That means the lender can sell the property to cover the loan amount if the borrower can't repay the loan.
You can choose between a variable rate home loan or a fixed rate mortgage. Mortgage terms in Australia range up to 30 years.
Do I need a mortgage broker?
You don’t necessarily need to apply for a home loan through a mortgage broker. Borrowers are free to compare options themselves and apply directly to their lender of choice. However, the majority of people in Australia (around three in every four) get their home loan through a broker.
Particularly for first-home buyers, a broker can help you understand the process, check your borrowing power, compare loan options and guide you with your application.
Your broker will also help you figure out how much of a home loan deposit you need.
How will my credit rating effect my home loan?
Lenders check your credit score when you apply for a home loan. If you have a good credit score, your chances of approval will be higher compared to a borrower with a lower score. Having a high credit score means you're more likely to be eligible with the widest range of lenders, meaning you'll have more scope to get the best deal on your loan.
How long does the process take?
The process of getting a home loan usually takes somewhere between 2-6 weeks from start to finish. But it can take longer if there are any complications. It’s important to allow time to thoroughly research and compare options, complete your application carefully, gather and provide all supporting documents (pay slips etc.) and then wait for the lender to assess your application. If you’re approved, you will need to review and sign the loan contract.
If you have signed a contract to buy a house subject to finance, most lenders will prioritise your application to meet the timing of the finance clause (typically 14 days).
What types of mortgages are there?
- Owner-occupier home loan: This is a standard home loan to buy a property you want to live in.
- Investment home loan: You can take out this home loan to buy an investment property (one from which you can get rental income).
- Variable rate home loan: This is a home loan where the interest rate can go up or down throughout the life of the loan.
- Fixed rate home loan: The interest rate on the loan is fixed for a period of time — typically between one and five years.
- Interest-only home loan: You only pay the interest component of your loan for a set period (up to five years).
- Principal & interest home loan: You pay both the principal of your home loan and the interest throughout the loan term.
- Construction loan: Designed for borrowers who plan to build a home or investment property, allowing you to withdraw funds in stages as needed to complete the construction.
- Land loan: A property loan used specifically to purchase vacant land or a house and land package.
- Low deposit home loan: Allows you to buy a home with a 5-10% deposit, instead of the standard 20% of the property’s value most lenders require.
- Low doc home loan: A low doc home loan requires minimal documentation when you apply. It’s often used by business owners or self-employed individuals who can’t provide the standard documents most lenders ask for, like payslips.
- Guarantor home loan: A guarantor home loan is backed by another person, typically a parent or family member, with home equity that’s used to secure your loan.
- Bridging loan: A short-term loan designed to cover the financing gap between purchasing a new property and selling an existing one.
- SMSF loan: This is a home loan used by a self-managed super fund (SMSF) to purchase an investment property.
- Bad credit home loan: Allows borrowers with a bad credit score/credit history to secure a home loan and purchase property.
EXPERT TIP: Traditionally first home buyers have needed to save up at least a 20% deposit to get a loan and avoid expensive lender's mortgage insurance (LMI). But it's now common for buyers to get a home loan with a deposit as low as 5%, with the help of a guarantor or through the government's First Home Guarantee scheme. It's worth exploring these options if you're eligible.
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Important information
^Comparison rate warning
Home loan comparison rates are calculated based on a loan amount of $150,000 repaid over a 25-year term with monthly repayments. The comparison rates only apply to the examples given. Different loan 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. Check with the provider for full loan details, including rates, fees, eligibility and terms and conditions to make sure the product is right for you.
Products, features and information displayed
General information only
The information on this page is general in nature and has been prepared without considering your objectives, financial situation or needs. You should consider whether the information provided and the nature of any home loan product is suitable for you and seek independent financial advice if necessary.
We are not providing you with a recommendation or suggestion about a particular home loan. You should read the relevant disclosure statements or other offer documents before deciding whether to apply for or continue to use a particular product.
What products, features and information are shown
While we make every effort to ensure all home loans available in Australia are shown in our comparison tables, we do not guarantee that all products are included.
Our product comparisons may not compare all home loan features and attributes relevant to you.
Product information, such as interest rates, fees and charges, is subject to change without notice. Before acting on any information, you should confirm the relevant product information with the lender.
How home loans are sorted and filtered by default
Users can easily change the sort order and apply product filters to our product comparison tables. However, when you arrive on a page initially, by default home loans are sorted by:
- Lowest regular repayment amount, then;
- Loans interest rate, then;
- Lowest comparison rate, then;
- Provider name (A-Z)
Home Loans Available Though A Broker
Some home loan products listed in our tables are available through a mortgage broker. These are the products with an option to ‘Check Eligibility on Money.com.au’. Mortgage brokers may not be able to offer loans from every provider and there may be more suitable loans for your personal circumstances.
Mortgage brokers are not authorised by Money Australian Credit Licence and operate under their own Australian Credit Licence, or as a credit representative of another Australian Credit Licensee. Mortgage brokers can make recommendations about home loan products that may suit your objectives, financial situation and needs.
Commission we may earn
Our tables feature all home loans available from lenders on our database that match the search criteria selected. Lenders do not pay to feature in our tables, nor do we earn commission if you click to visit a lender’s website. The order of the products in the table is not influenced by any commercial arrangements.
If you get help from a mortgage broker as a result of visiting this page, we may earn a commission.