Which of the big four banks has the best home loan rates?
- The lowest variable rate available from a big four bank is 6.44% p.a. (2-year intro rate) from Westpac. This is for an owner-occupier loan (with P&I repayments) and a maximum loan-to-value ratio (LVR) of 70%.
- The lowest fixed rate available from a big four bank is 6.49% p.a. from Westpac. That’s for a two-year fixed term for owner-occupiers making P&I repayments with a maximum LVR of 70%.
According to Money.com.au's analysis of interest rates from the big four banks, Commonwealth Bank offers the lowest variable rate, while Westpac has the lowest fixed rate home loans. The table below is sorted by the lowest variable rates.
Lowest interest rates for each of the big four banks
| Lowest variable mortgage interest rate | Lowest fixed mortgage interest rate | |
|---|---|---|
Other lenders on Money’s database | 5.69% p.a. (6.15% p.a. comparison rate) | 5.59% p.a., fixed for 1 year (6.29% p.a. comparison rate) |
Commonwealth Bank | 6.34% p.a. (6.72% p.a. comparison rate) | 5.89% p.a., fixed for 3 years (7.80% p.a. comparison rate) |
Westpac | 6.44% p.a. (6.76% p.a. comparison rate) | 5.89% p.a., fixed for 3 years (7.32% p.a. comparison rate) |
ANZ | 6.54% p.a. (6.54% p.a. comparison rate) | 6.54% p.a., fixed for 2 years (7.10% p.a. comparison rate) |
NAB | 6.79% p.a. (6.87% p.a. comparison rate) | 5.99% p.a., fixed for 3 years (6.64% p.a. comparison rate) |
Big four banks ranked by value of home lending
Commonwealth Bank
- Owner-occupier home loans: $369,715 million
- Investor home loans: $185,129 million
About Commonwealth Bank
The Commonwealth Bank of Australia (CBA) has the largest home loan book among the big four banks. It was founded under the Commonwealth Bank Act in 1911 and today serves about 15.9 million customers across its Australian and international branches, according to its website. CBA has several subsidiaries, including Bankwest and digital home loan lender Unloan.
Source: APRA’s monthly ADI statistics, May 2024.
Westpac
- Owner-occupier home loans: $313,247 million
- Investor home loans: $159,236 million
About Westpac
Westpac is the second largest home lender in Australia by home lending market share. It was founded in 1817 as the Bank of New South Wales and later became the Westpac Banking Corporation in 1982. This makes Westpac the first bank established in Australia and the oldest of the big four banks. Westpac and its subsidiaries (St.George, Bank of Melbourne, BankSA and RAMS) serve about 12.7 million customers, according to its website.
Westpac also sponsors the Westpac Lifesaver Rescue Helicopter Service (WLRHS).
NAB
- Owner-occupier home loans: $209,839 million
- Investor home loans: $109,441 million
About NAB
National Australia Bank (NAB) is Australia's third biggest home loan lender. It was established 1981 after a merger between the National Bank of Australasia and the Commercial Banking Company of Sydney. NAB serves about 8.5 million customers worldwide, according to its website. It also owns digital bank UBank.
ANZ
- Owner-occupier home loans: $199,109 million
- Investor home loans: $99,118 million
About ANZ
The Australia and New Zealand Banking Group (ANZ) is the smallest of the big four banks, based on its home loan book size. ANZ was formed in 1951 following a merger of the Bank of Australasia and the Union Bank of Australia. ANZ serves about 8.5 million customers, according to its website.
ANZ was the first bank to introduce contactless payments in Australia with Apple Pay.
Big four banks vs other lenders: Who has the best interest rates?
Based on Money.com.au’s analysis of a wide range of current mortgage rates, smaller lenders tend to have lower interest rates than the big four banks. However, it will depend on your loan type and LVR. Lower LVRs typically mean lower rates and higher LVRs mean higher rates.
Mansour Soltani , Home Loans Expert
“Smaller lenders typically operate with lower overhead costs and tend to offer lower rates to compete for market share against the big four banks. So, if you’re a borrower chasing the lowest rate possible, we’d maybe suggest going with a smaller lender. On the flip side, if your LVR is sub 60-70%, you’d probably get a good rate from one of the big four. There may be cases where one of the big four don’t have the best rates, but have policy tweaks suitable to your borrower scenario. For example, ANZ will accept one year of financials for business owners, while most other lenders require two years’ worth. NAB doesn't ask for a detailed breakdown of expenses if you withdraw over $100,000 in equity, unlike some other banks.”
Mansour Soltani , Home Loans Expert
How satisfied are Australians with the big four?
According to the latest Roy Morgan banking customer satisfaction ratings, CBA has the highest home loan customer satisfaction among the big four banks, with a rating of 76.1%. The average customer satisfaction for home loans among the big four banks as a collective is 72.7%. NAB came second with a 71.8% satisfaction score, followed by ANZ (70.3%) and Westpac (68.7%). Customer satisfaction is measured on a scale of ‘very satisfied’, ‘fairly satisfied’, ‘neither satisfied nor dissatisfied’, ‘fairly dissatisfied’ and ‘very dissatisfied’.
Are Australia’s big four banks safer than other lenders?
The big four banks are generally no more or less safe than smaller lenders. The Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC) regulate all registered financial institutions, regardless of their size.
Additionally, any bank that accepts deposits from the public — known as authorised deposit-taking institutions (ADIs) — is covered under the Financial Claims Scheme (FCS). Under this scheme, if a lender was to collapse, the government would guarantee up to $250,000 of your money (per account holder, per institution).
Additionally, some smaller lenders are in fact divisions or subsidiaries of one of the big four. For example, UBank is backed by NAB, while St.George, Bank of Melbourne, BankSA and RAMS are under the umbrella of the Westpac Group.
Mansour Soltani , Home Loans Expert
“There’s definitely a misconception that going with a smaller lender is risky because they may go bust. No banks have gone bust in Australia. In the unlikely event of a lender collapse, a larger bank would likely acquire its customer and loan portfolio and your mortgage would get sold to that larger bank.”
Mansour Soltani , Home Loans Expert
Getting a mortgage with the big four: Pros & cons
Pros
- Major banks tend to have more home loan products, including home loans with introductory discount rates, package home loans, no-frills home loans, etc.
- Big banks can invest heavily in technology, including mobile apps & digital banking (e.g. PayID, contactless payments) to make managing your home loan and money easier.
- The big four have the most extensive networks of ATMs and physical branches, which is especially important in regional areas and for customers who prefer in-person banking.
- Big four banks have strong brand recognition and established reputations, which may provide reassurance to borrowers, especially during economic downturns.
Cons
- Based on Money.com.au’s analysis, the big four tend to have higher interest rates on both variable and fixed rate home loan products compared to smaller lenders.
- The big four banks may have stricter lending criteria, especially for borrowers with high LVRs (e.g. first-home buyers).
- The big four generally have limited options for borrowers with low credit scores and non-conforming borrowers (e.g. self-employed). This is where a smaller specialist lender may be more suitable.
- Due to their size, big banks may provide less personalised service than smaller lenders.
