Best Home Loan Rates 2025

Current Best Home Loan Rates (January 2025)

These are actual rates, not promotional teaser rates. Updated daily.

⚠️ Important: Advertised rates below assume 80% LVR (20% deposit), owner-occupier, principal & interest. Your actual rate depends on YOUR situation.

🔄 Variable Rate Home Loans

🏆 Best Overall

Online Lenders (ING, Athena, Unloan)

5.79% - 6.04%

Comparison: 5.95% - 6.20%

✓ 100% offset account
✓ Unlimited extra repayments
✓ No ongoing fees ($0-$10/month)
⚠️ Online-only service

$600K loan: $3,480/month
Save $120/month vs big banks

Big 4 Banks (CBA, ANZ, Westpac, NAB)

6.14% - 6.39%

Comparison: 6.30% - 6.55%

✓ Full-service banking
✓ Branch support
✓ Offset accounts available
⚠️ Higher fees ($10-$15/month)

$600K loan: $3,600/month

Regional Banks & Credit Unions

5.99% - 6.29%

Comparison: 6.15% - 6.45%

✓ Competitive rates
✓ Personal service
✓ Flexible lending policies
⚠️ Limited branch network

$600K loan: $3,540/month

🔒 Fixed Rate Home Loans

1-Year Fixed

5.89% - 6.29%

Comparison: 6.10% - 6.50%

✓ Certainty for 1 year
✓ Lowest fixed rates
⚠️ Short protection period
⚠️ Break fees if refinance

2-Year Fixed

5.99% - 6.39%

Comparison: 6.20% - 6.60%

✓ 2 years rate certainty
✓ Balanced protection
⚠️ Limited extra repayments
⚠️ No offset (most lenders)

3-5 Year Fixed

6.19% - 6.69%

Comparison: 6.40% - 6.90%

✓ Long-term certainty
✓ Budget stability
⚠️ Higher rates
⚠️ High break fees

💡 Fixed vs Variable in 2025:

Variable currently winning: Variable rates (5.79%+) are lower than fixed rates (5.89%+). Most experts predict RBA will hold or cut in 2025.

Consider fixed if: You value certainty and want to lock in current rates before potential rises.

📊 Investment Property Rates

Variable Investment (P&I)

6.04% - 6.54%

Comparison: 6.20% - 6.70%

⚠️ 0.20-0.40% premium vs owner-occupier
✓ Offset accounts available
✓ Tax-deductible interest

Interest-Only Investment

6.24% - 6.84%

Comparison: 6.40% - 7.00%

⚠️ Additional 0.20-0.30% premium
✓ Lower monthly repayments
✓ Maximum tax deductions
✓ Better cash flow

💰 What 0.20% Rate Difference Really Means

$500K Loan @ 6.00%

Monthly: $2,998

Total Interest (30yr): $579,190

$500K Loan @ 5.80%

Monthly: $2,938

Total Interest (30yr): $557,680

💰 Total Savings:
$60/month = $21,510 over 30 years

We Compare All 83 Australian Lenders

Major banks, regional banks, credit unions, and specialist lenders—all actively competing for your loan

Major Banks

Big 4 + Regional banks like BOQ, Bendigo, Macquarie, Suncorp

Credit Unions

Member-owned institutions often offering competitive rates

Non-Bank Lenders

Specialist lenders including AFG products, Liberty, Pepper Money

Total Lenders

All verified & actively lending in 2025

Why We Compare 83 Lenders (Not Just "The Big 4")

💰

Better Rates

Non-bank and online lenders often beat Big 4 rates by 0.10-0.40% - that's $720-$2,880/year on a $600K loan

✅

Higher Approval Odds

Self-employed? Bad credit? Specialist lenders have more flexible criteria than major banks

🎯

Better Features

100% offset accounts, $0 monthly fees, unlimited redraws - features that save thousands over 30 years

🤖 Our algorithm compares all 83 lenders in seconds

Answer 8 questions → See which lenders you qualify for → Compare rates & features side-by-side

Compare All 83 Lenders Now →

How to Qualify for the Lowest Rate

Advertised rates are for ideal borrowers. Here's how to get them:

💵

1. Larger Deposit = Lower Rate

LVR (loan-to-value ratio) is the biggest rate factor.

Deposit	LVR	Typical Rate	Premium
30%+	≤70%	5.79%	Best rate
20%	80%	5.99%	+0.20%
10%	90%	6.29%	+0.50% + LMI
5%	95%	6.49%	+0.70% + LMI

Tip: If you're at 85% LVR, try to get to 80% (save a bit more or borrow slightly less). The rate drop and LMI savings are massive.

📊

2. Credit Score Matters

Higher credit score = access to better lenders and rates.

Excellent (740+)

✓ Best rates available (5.79%+)

✓ All lenders compete for you

✓ Lowest fees

Good (670-739)

✓ Competitive rates (5.89-6.19%)

✓ Most lenders approve

⚠️ May need larger deposit

Average (580-669)

⚠️ Limited lender choice

⚠️ Higher rates (6.29-6.79%)

⚠️ 20%+ deposit required

Below 580

❌ Specialist lenders only

❌ Rates 7-10%+

❌ Need 25-30% deposit

Tip: Check your credit score FREE at CreditSavvy or GetCreditScore BEFORE applying. Fix any errors first.

🏠

3. Owner-Occupier vs Investment

Owner-occupier rates are 0.20-0.40% lower than investment rates.

Owner-Occupier

5.79% - 6.29%

✓ Lower perceived risk
✓ Better rates
✓ More low-deposit options

Investment Property

6.04% - 6.54%

⚠️ Higher risk to lenders
⚠️ Rate premium
✓ BUT interest is tax-deductible

Warning: Don't lie about occupancy. Lenders check, and it's mortgage fraud. Not worth it.

💼

4. Employment Stability

Lenders love stable, verifiable income.

✅ Best Rates:

Full-time PAYG employee
2+ years same employer
Professional occupation
Steady income growth

✓ Good Rates:

Permanent PAYG 6+ months
Self-employed 2+ years
Contract with extension history

⚠️ Higher Rates/Fees:

Casual employment
Self-employed under 2 years
Commission-based income
Frequent job changes

⚖️

5. Low Loan-to-Income Ratio

Borrowing less relative to your income = better rates.

Your Loan-to-Income (LTI) Ratio: Loan Amount ÷ Gross Annual Income

LTI under 4x	✅ Excellent - best rates available
LTI 4-5x	✓ Good - standard rates
LTI 5-6x	⚠️ Tight - may need larger deposit
LTI 6x+	❌ Hard - premium rates or declined

Example: $100K income borrowing $400K = 4x LTI (good). Same income borrowing $650K = 6.5x LTI (will pay higher rate or get declined).

🏦

6. Choose the Right Lender Type

Different lender types have different rate strategies.

💻 Online/Neo Banks

Lowest Rates: 5.79-6.04%

✓ Lowest rates (low overhead)
✓ Great online features
❌ No branches
❌ Limited complex situations

Best for: Tech-savvy, simple situations

🏦 Big 4 Banks

Higher Rates: 6.14-6.39%

⚠️ Higher rates
✓ Full service + branches
✓ Relationship benefits
✓ Handle complex scenarios

Best for: Want full-service banking

🏛️ Regional/Credit Unions

Competitive: 5.99-6.29%

✓ Competitive rates
✓ Personal service
✓ Flexible policies
⚠️ Limited locations

Best for: Personal touch + good rates

⭐ Specialist Lenders

Higher: 6.49-8.99%

⚠️ Higher rates
✓ Approve difficult situations
✓ Self-employed friendly
✓ Bad credit OK

Best for: Complex/non-standard scenarios

Don't Just Chase the Lowest Rate

A slightly higher rate with better features can save you more money long-term

❌ Loan A: Lowest Rate, No Features

5.79% p.a.

❌ No offset account
❌ No extra repayments
❌ High exit fees ($800)
❌ No redraw facility
❌ $10/month account fee

$600K loan over 30 years:

Monthly: $3,503

Total Interest: $661,080

Fees: $3,600

Problem: Can't make extra repayments to save interest. Stuck until exit fee expires.

✅ Loan B: Slightly Higher Rate, Full Features

5.99% p.a.

✅ 100% offset account
✅ Unlimited extra repayments
✅ No exit fees
✅ Redraw facility
✅ $0 monthly fees

$600K loan over 30 years:

Monthly: $3,597 (base repayment)

You add $500/month extra: $4,097

Total Interest: $418,200

Loan paid off in: 19 years

🏆 You Save: $242,880 in interest and 11 years!

✓ Essential Features Worth 0.10-0.20% Higher Rate:

💳

100% Offset Account

Value: Massive

Park your salary & savings. Every $10K in offset saves ~$600/year in interest.

Example: $50K in offset = $3,000/year saved

💰

Unlimited Extra Repayments

Value: High

Pay off loan faster. Every $10K extra saves $50K+ interest over life of loan.

Worth 0.50%+ rate premium easily

🔓

No/Low Exit Fees

Value: Medium-High

Flexibility to refinance if better rate comes along. Fixed period exit fees OK, but avoid 3-5 year fees on variable.

Typical exit fee: $300-$800

🔄

Redraw Facility

Value: Medium

Access extra repayments if emergency arises. Acts as savings buffer.

Better than offset for tax purposes on owner-occupier loans

📱

Modern Online Platform

Value: Medium

Easy management, instant transfers to offset, mobile app, real-time balance.

Avoid lenders with clunky 2005-era websites

🏦

Portability

Value: Low-Medium

Transfer loan to new property if you move. Avoid exit fees and reapplication.

Useful but not essential

💡 The Verdict:

5.79% with no features vs 5.99% with offset/extras = Choose 5.99% every time.

The ability to make extra repayments and use offset will save you 10x more than the 0.20% rate difference.

7 Rate Shopping Mistakes That Cost You Thousands

Only Looking at Big 4 Banks

Cost: 0.30-0.60% higher rate = $50K-$100K extra over 30 years

Big 4 rates: 6.14-6.39%. Online/regional lenders: 5.79-6.04%. That's $90-$180/month difference on a $600K loan.

Fix: Compare AT LEAST 5-10 lenders across different types (online, regional, Big 4).

Trusting "Comparison Rate" Too Much

Problem: Comparison rates assume $150K loan over 25 years. If your loan is different, they're useless.

Example: $600K loan with $1,000 upfront fee = 0.03% impact. But comparison rate assumes $150K loan = 0.13% impact. Misleading!

Fix: Focus on actual interest rate + fees for YOUR loan amount and term.

Falling for Honeymoon Rates

Cost: Pay 6.89% after 1-year honeymoon of 5.49% expires

Some lenders advertise 5.49% rates, but it's only for 12 months. Then reverts to 6.89% standard variable. You've locked yourself in.

Fix: Ask "What's the revert rate after honeymoon?" and "What are exit fees?" Calculate full cost.

Not Negotiating with Your Current Lender

Missed Savings: $2,000-$5,000/year by not asking for rate reduction

Lenders will reduce your rate by 0.10-0.50% if you threaten to refinance. Retention teams have discretion.

Fix: Call annually and say "Competitor is offering 5.89%. Can you match or I'll refinance?" Works 70% of the time.

Multiple Credit Applications at Once

Cost: Kills your credit score, making you ineligible for best rates

Every application is a "hard inquiry" on your credit file. 3+ inquiries in a month = red flag = declined or higher rates.

Fix: Get ONE broker to compare lenders (doesn't affect credit), then apply to just 1-2 lenders.

Ignoring Package Discounts

Missed Savings: 0.10-0.30% rate discount

Many lenders offer 0.10-0.30% discount if you get credit card, transaction account, or insurance with them.

Fix: Ask "What's your best package rate?" - but only if package fees are lower than the discount value.

Refinancing Too Often

Cost: $1,000-$3,000 in refinancing costs each time

Yes, refinancing saves money. But doing it every year costs $1K-$3K each time (application fees, valuation, discharge, legal).

Fix: Refinance if rate difference is 0.30%+ and you'll stay 2+ years. Otherwise, just negotiate with current lender.

Best Home Loan Rates FAQs

What is the lowest home loan rate available right now?

As of January 2025: 5.79% p.a. from online lenders like ING, Athena, and Unloan for owner-occupier variable with 20%+ deposit.

But this assumes perfect scenario: 80% LVR, excellent credit, stable income, principal & interest.

Your actual rate: Use our comparison tool to see what rate YOU qualify for based on your situation.

Should I fix or go variable in 2025?

Variable is currently better value.

Variable rates (5.79%+) are lower than 1-year fixed (5.89%+) and 2-year fixed (5.99%+).

Most economists predict RBA will hold or cut rates in 2025, so variable likely to stay competitive.

Fix if: You really value certainty and can't handle rate rises. But you'll pay 0.10-0.40% premium for that certainty.

How often do home loan rates change?

Variable rates: Change whenever lenders adjust them (usually after RBA cash rate changes, but not always).

Fixed rates: Locked in for 1-5 years. Don't change during fixed period.

RBA meets: First Tuesday of every month (except January). Cash rate changes flow through to home loans within days-weeks.

Can I negotiate a better rate with my current lender?

Yes! And you should, annually.

Lenders have "retention rates" 0.20-0.70% below your current rate. They'd rather discount you than lose you to a competitor.

How to do it:

1. Find a competitor rate 0.30%+ lower
2. Call your lender: "I'm considering refinancing to [Lender] at [Rate]. Can you match?"
3. If front-line says no, ask for retention team
4. Be prepared to actually refinance if they won't match

Success rate: ~70% get at least 0.10% discount

What's the difference between interest rate and comparison rate?

Interest Rate: The actual rate charged on your loan. Used to calculate repayments.

Comparison Rate: Interest rate + most fees, standardized to $150K loan over 25 years. Meant to help you compare apples-to-apples.

Problem: Comparison rate is useless if your loan isn't $150K over 25 years (most aren't).

Better approach: Calculate total cost = (Interest Rate × Loan Amount × Term) + All Fees

Do mortgage brokers get better rates than going direct?

Sometimes yes, often the same.

Brokers access wholesale rates not available to public, and some lenders offer broker-exclusive discounts.

Pros of using broker:

✓ Compare 83 lenders in one go
✓ Know which lenders will approve you
✓ Access broker-only rates
✓ Free service (lender pays broker)

Cons: Some brokers push lenders that pay them more (but good brokers don't do this)

How much can I save by refinancing to a better rate?

Typically $2,000-$6,000/year per 0.50% rate drop.

Example: $600K loan

Current: 6.49% = $3,804/month
Refinance to: 5.99% = $3,597/month
Monthly saving: $207
Annual saving: $2,484
10-year saving: $24,840

Refinancing costs: $1,000-$2,000. Pays for itself in 4-8 months.

Why are investment rates higher than owner-occupier rates?

Higher risk = higher rate.

Lenders see investment loans as riskier:

If you're in financial trouble, you'll prioritize your home over investment
Investment properties have vacancy periods (no income)
Tenants may damage property or not pay rent
You're relying on rental income to service loan

Premium: Usually 0.20-0.40% higher

BUT: Investment interest is tax-deductible, so your after-tax cost is lower than owner-occupier loans.

Important Information