Home loan interest rates in Australia and how to compare loans

Home loan interest rates in Australia right now

Advertised rates change daily, so the most reliable picture of what borrowers actually pay is the RBA's monthly lending rate data, which averages the rates charged on new and existing loans across all lenders. Three patterns hold across the table: investors pay more than owner-occupiers, borrowers above 80% LVR pay more than those below it, and fixed terms longer than three years currently cost more than shorter fixes or variable.

Lenders' variable rates move mostly, though not only, with the RBA cash rate. The RBA has raised it four times in 2026 (effective 4 February, 18 March, 6 May and 30 September) and held it in June and August, so the cash rate target is 4.60% from 30 September 2026. Its next decision is due on 3 November 2026. Lenders usually announce any change to their variable rates within days of a move.

What the latest rate rise means for your repayments

If your lender passes on the full 0.25 percentage point rise, a $500,000 loan costs about $82 more a month, a $600,000 loan about $98 more and an $800,000 loan about $131 more, on a 30-year principal and interest loan starting from the RBA's August 2026 average rate. Lenders set their own variable rates, so check the letter or notice from yours for the new rate and the date it applies.

Twelve of the 15 lenders we review had announced a 0.25 percentage point rise to their variable rates when we checked on 10 October 2026. Most took effect on 9 October 2026; Macquarie's takes effect on 15 October.

General information only. It doesn't take into account your objectives, financial situation or needs. Check the lender's key facts sheet, credit guide and TMD before you apply. We don't compare every lender, and we may earn a commission if you apply through our links.

For your own balance, rate and remaining term, use our mortgage repayment calculator, and see how a further rise would affect you with the mortgage stress test calculator.

How to compare home loans

Comparing on the headline rate alone is how people end up in the wrong loan. Work through these steps instead.

1. Know your LVR. Divide the loan by the property value. Most lenders price in LVR bands (commonly at 60%, 70%, 80% and 90%), and above 80% you'll usually pay lenders mortgage insurance unless you use a government scheme.
2. Decide on features first. An offset account, fixed rate or split loan changes which products you should compare. There's no point comparing a basic loan with a packaged one if you need the offset.
3. Get key facts sheets. Every lender must give you a key facts sheet for your loan amount on request, in the same layout, with the rate, the comparison rate, total repayments and fees.
4. Compare comparison rates for your loan size. Package fees matter less on a large loan and more on a small one.
5. Check the rules. Extra repayment caps on fixed loans, break costs, revert rates and discharge fees all affect the real cost.
6. Ask your current lender to match. If you already have a loan, a better offer elsewhere is your bargaining chip.

What the comparison rate includes, and what it leaves out

A comparison rate rolls the interest rate and most fees and charges into a single percentage. For home loans it is calculated on a secured loan of $150,000 over 25 years with monthly repayments, including any interest rate discounts. Lenders must print a warning with it, because a different loan amount or term gives a different result: on a $600,000 loan, a $395 package fee adds far less to the true rate than it does on $150,000.

Some costs are left out entirely. Lenders' own explanations list government charges, redraw fees, early repayment fees and break costs as excluded, along with savings such as fee waivers. For fixed-rate loans the comparison rate assumes the loan reverts to the lender's variable rate at the end of the fixed term, which is why a fixed loan's comparison rate can sit well above its fixed rate.

Which bank gives the best home loan rates?

None consistently. Each lender reprices on its own schedule, sets different rates by LVR and loan size, and reserves its sharpest pricing for particular channels (online applications at CommBank and Westpac), packages (Westpac's Rocket Repay, St.George) or borrowers with low LVRs. Our reviews of the four major banks set out how each one prices its loans: the CommBank home loan review, Westpac home loan review, ANZ home loan review and NAB home loan review. Digital and non-bank lenders such as Unloan, Athena and ubank often advertise lower variable rates than the big four, but they may lack features you want or not take part in the 5% Deposit Scheme. Our lender reviews set out each lender's pricing rules so you can see which one is likely to suit your situation.

Types of home loan rates

Home loan features worth paying for

Features cost money, either as fees or as a higher rate than the lender's basic loan. Moneysmart's rule of thumb is that an offset is only worth paying for if you'll keep a meaningful balance in it. To check, divide the feature's annual cost by your interest rate: at 6.23%, a $395 package needs about $6,300 of average offset balance (or an equivalent rate discount) just to break even. Our offset calculator works out the saving on your own balance. Our offset accounts guide compares offset at every lender we review.

Deposit, LVR and lenders mortgage insurance

With a deposit of less than 20%, you'll usually pay lenders mortgage insurance, a one-off premium that protects the lender and is typically added to your loan. First home buyers can avoid it with a 5% deposit through the Australian Government 5% Deposit Scheme, which since 1 October 2025 has no income caps or waitlist, provided the home is under the local price cap and the lender takes part. Other routes are Help to Buy (2% deposit), a family guarantee, or a profession-based waiver at lenders such as NAB and Westpac. APRA's figures show 29.7% of new bank home loans in the June quarter 2026 had an LVR of 80% or more. See low deposit home loans and first home buyer loans.

How lenders decide what you can borrow

Under the National Credit Act, lenders must make reasonable inquiries about your finances, verify them and assess that the loan isn't unsuitable for you. In practice that means testing your income against your living expenses, existing debts and the new repayment, calculated at a higher rate than you'll actually pay. APRA expects the banks it regulates to use a buffer of at least 3 percentage points above the loan's rate, a setting it confirmed again in November 2025.

Since 1 February 2026 APRA has also limited banks' new lending at a debt-to-income ratio of six or more to 20% of their new mortgage lending, measured separately for owner-occupiers and investors. It isn't a cap on any one borrower, but a bank near its limit may be less willing to lend at very high DTI ratios. Try our stress test calculator to see your repayment at the buffer rate.

Banks vs non-bank lenders

Banks are authorised deposit-taking institutions regulated by APRA as well as ASIC. Non-bank lenders such as Athena don't take deposits, so they aren't APRA-regulated banks, but they still need an Australian credit licence and must follow the same responsible lending laws, enforced by ASIC. Several digital brands are in fact major banks: Unloan and Bankwest are divisions of CommBank, ubank is part of NAB, and St.George is a division of Westpac.

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