Home loan comparison

Lender

Variable
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loans.com.au – Variable Home Loan (LVR < 90%)

    Variable
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    HSBC – Home Value Home Loan (Principal and Interest) (LVR < 80%)

      Fixed
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      Newcastle Permanent – Fixed Rate Home Loan (Principal and Interest) 1 Year

        Variable
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        Beyond Bank – Purple Basic Variable Home Loan (New Customer) (LVR 60%-80%)

          Variable
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          Athena – Straight Up Owner Occupied - Celebrate (LVR 50%-60%) (Principal and Interest)

            Fixed
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            IMB Bank – Fixed Rate Home Loan (Principal and Interest) 1 Year (LVR ≤ 80%)

              Variable
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              Liberty Financial – Liberty Low Rate Home Loan (LVR < 95%)

                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of July 25, 2024. View disclaimer.

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                How Will Repayments Change If Rates Move

                This calculator provides you with an estimate of how your minimum monthly repayment might change if your interest rate changes.

                Assumptions:

                Repayments

                We assume that:

                • repayments are made at the interval specified by you;
                • the interest rate charge is divided equally over 12 monthly payments;
                • weekly and fortnightly loan repayment amounts are assumed to be a quarter and a half of the monthly repayment amount respectively; and
                • interest is charged to the loan account at the same frequency and on the same day as the repayments are made.

                Only the initial repayment amount is calculated and we assume this repayment stays the same for the loan term. In reality, repayment amounts can change for a variety of reasons.

                We assume that the loan amount, loan term and repayment frequency remains the same as the interest rate changes.

                Fees

                We do not take into account any fees or charges.

                Why do rates changes?

                The most common reason loan interest rates change is because the Reserve Bank of Australia (RBA) will change the official cash rate. The RBA meets each month to review the cash rate and its influencing factors (such as the economy), and make a decision to either increase, decrease, or hold the cash rate.

                The cash rate is the market standard for interest rate on loans. So, the lower the cash rate, the lower interest rates financial institutions will have on their financial products, such as home loans, personal loans, savings accounts and term deposits. This also impacts the lenders cost of funding.

                However, lenders can increase or decrease their interest rates outside of any RBA cash rate movements. This may occur if a lender obtains funding through difference sources, and funding costs change, for example the bank bill swap rate.

                The end of a fixed rate term can also be a reason your interest rate changes. Once your fixed term ends, your mortgage will revert to a variable rate. Variable rates are susceptible to change, so it can go up and down depending on the cash rate set by the RBA and your lenders cost of funds. 

                What can I do to prepare myself for movement?

                A high interest rate will result in increased loan repayments, and this can result in less disposable income. Here are some useful tips you can use to prepare for any potential rate changes. 

                Find a repayment that is comfortable to you

                Figure your home loan repayment budget by using our home loan repayment calculator. You can input the interest rate on your loan, loan amount, and repayment frequency according to your personal situation. Finding your approximate repayment amount can help you determine how to build a buffer for any rate increase that may affect you in the future. Experts have mentioned that the current cash rate of 0.10% is looking to increase quite a bit over the coming years.

                Consider a fixed rate home loan

                A fixed rate home loan will have a ‘locked in’ interest rate for a period of time, usually between 1 to 5 years. That means your interest rate won’t change if the RBA cash rate increases or decreases, and your mortgage repayments will remain the same during the fixed rate period.

                Refinance to a lower rate

                Refinancing to a lender who can offer you a lower rate can help to reduce your monthly payments. This may also allow you to increase the equity in your property if your property value has increased, as a new lender will require you to obtain a new valuation. This can result in a better deal on your home loan and can save you even more money. You can use our refinance calculator to find if you are getting a better deal compared to your current loan.

                What is better, variable or fixed?

                Key benefits of variable rate

                A variable rate has more flexibility since it comes with more flexible repayment options. This includes having a redraw facility or an offset sub-account which can help you reduce the amount of interest being charged on your loan.

                A variable rate home loan typically provides the option to make free additional loan repayments. Doing so can reduce the length of your home loan term and reduce the overall amount of interest you will need to pay.

                Since your interest rate is not locked in, it is possible that your rate will decrease if the cash rate drops, which would result in lower mortgage repayments.

                Key benefits of fixed rate

                One of the benefits of a fixed rate home loan is the certainty of your repayments. Your interest rate is locked in, so you will not be affected by any changes in the RBA cash rate, regardless if it increases or decreases.

                A fixed rate is a great option first time home buyers who are still adapting their budgets accomodate for home loan repayments. 

                It iss possible to split your loan if you cannot decide between a variable or a fixed rate. You can split your loan between 50:50, 60:40 or any other ratio that is suitable to you. You can ask your lending specialist about your options. 

                When to seek professional advice?

                All of us have a unique financial situation, so it’s always best to seek professional advice that is tailored to you. Many lenders have lending specialists that can assist you with their financial products. 

                Other tips?

                Make additional repayments

                 If you have extra money on hand, it can be a good idea to make extra repayments while things are affordable to weather future storms and pay off your loan sooner. 

                Offset account

                An offset account is generally available on variable loans. This is a transaction account that lets you make deposits and withdrawals and helps you save on interest. For instance, if you have a $500,000 home loan and $10,000 cash sitting in your offset account, your interest will only be calculated on the difference between these amounts - $490,000.

                Loan term

                Refinancing to a longer loan term can give you the benefit of reducing your mortgage repayments, however, this will result in a higher overall loan amount in the long run, because you will be paying interest on your loan for a longer time period.

                Explore other repayment frequencies

                To suit your pay schedule, it can be a good idea to try other repayment frequencies. Paying more on a regular basis, such as weekly or fortnightly is a good way to make extra repayments, shorten the time it takes to pay back your loan, and save in interest.

                Home Loan FAQs

                With a loan amount of $500,000 and home loan interest rate of 2.47%, you will be paying approximately $1,967.81 per month for 30 years. On a fortnightly basis, it will be $983.91, and on a weekly basis it will be $491.95.

                Home loan calculators are tools that can help you give rough estimates on how much you will be spending on your mortgage. The amount will be based on factors such as loan amount, term, interest rate, repayment frequency (monthly, fortnightly, weekly), and repayment type (principal and interest, interest only).

                With a loan amount of $200,000, and an interest rate of 2.47%, you could expect to pay indicatively $787.13 per month. On a fortnightly basis this would be $393.57, and weekly this would be $196.78.

                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 9 July 2024.

                ^The addition of offset sub-account means your comparison rate will change.

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