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The best home loan is the one with the lowest comparison rate for your loan amount that still has the features you'll use. As a benchmark, Australians taking out a new owner-occupier variable loan paid an average of 6.24% in July 2026, and investors 6.40% (RBA). The cash rate is 4.35% as at 28 September 2026.
This guide explains how to compare loans properly, what the comparison rate includes and leaves out, which features are worth paying for, and how lenders decide what you can borrow. It links to our reviews of 15 lenders, eight topic guides and two calculators.
By Better Rate Mate Editorial Team ยท Last reviewed
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.
| Loan type | Owner-occupier | Investor |
|---|---|---|
| New variable loans | 6.24% | 6.40% |
| New fixed, 3 years or less | 6.25% | 6.42% |
| New fixed, more than 3 years | 6.86% | 7.02% |
| New principal and interest | 6.16% | 6.32% |
| New interest-only | 6.98% | 6.50% |
| New loans below 81% LVR | 6.22% | 6.38% |
| New loans at 81% LVR or more | 6.33% | 6.74% |
| All outstanding variable loans | 6.24% | 6.48% |
Lenders' variable rates move mostly, though not only, with the RBA cash rate. The RBA raised the cash rate three times in the first half of 2026 and has held it since May. Its next decision is due on 29 September 2026; lenders usually announce any change to their variable rates within days of a move.
| Decision date | Change | Cash rate target |
|---|---|---|
| 4 February 2026 | +0.25 | 3.85% |
| 18 March 2026 | +0.25 | 4.10% |
| 6 May 2026 | +0.25 | 4.35% |
| 17 June 2026 | No change | 4.35% |
| 12 August 2026 | No change | 4.35% |
| 29 September 2026 | Decision due | n/a |
Comparing on the headline rate alone is how people end up in the wrong loan. Work through these steps instead.
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.
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 low-LVR borrowers (Suncorp's headline rate needs an LVR of 60% or less). 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.
Moves when the lender changes it, usually after RBA decisions. Unlimited extra repayments, redraw and offset are common. See fixed vs variable.
Locked for one to five years. Certain repayments, but capped extra repayments, break costs if you leave early, and rarely an offset.
Part fixed, part variable, so you hedge rate moves and keep an offset on the variable portion.
Lower repayments for a set period, then a jump to principal and interest. More common for investors; see investment loans.
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 6.24%, a $395 package needs about $6,300 of average offset balance (or an equivalent rate discount) just to break even. Our offset accounts guide compares offset at every lender we review.
| Feature | What it does | Typical cost at lenders we review |
|---|---|---|
| Offset account | Balance is deducted from the loan when interest is calculated | $0 (Athena Power Up) to $10 a month (CommBank Digi/Simple, ANZ, BOQ) or inside an annual package |
| Redraw | Lets you take back extra repayments | Usually free on variable loans; often unavailable while fixed |
| Package | Annual fee for rate discounts and fee waivers | $248 (Macquarie Offset), $299 (ING Orange Advantage), $375 (Suncorp), $395 (CommBank, Westpac, St.George, ME CompleteME, Bankwest) |
| Split loan | Part fixed, part variable | Free at Macquarie; available at most banks |
| Extra repayments while fixed | Pay down a fixed loan without break costs | From $500 a month (Suncorp) to $30,000 over the term (Westpac) |
| Rate lock | Holds a fixed rate until settlement | $500 (ubank) to $750 (CommBank); St.George capped at $1,000 up to $2m |
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.
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 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.
Each review sets out the lender's loans, fees, offset and fixed-rate rules, 5% Deposit Scheme status, pros and cons, and a repayment calculator, checked against the lender's own website.
| Lender | Type | 5% Deposit Scheme |
|---|---|---|
| CommBank | Major bank | Yes |
| Westpac | Major bank | Yes |
| ANZ | Major bank | Yes |
| NAB | Major bank | Yes |
| ubank | Digital bank | No |
| St.George | Bank (Westpac Group) | Yes |
| Bankwest | Bank (CommBank Group) | No |
| ING | Digital bank | No |
| Macquarie | Bank | No |
| Suncorp | Bank (ANZ Group) | No |
| BOQ | Bank | No |
| ME Bank | Digital bank (BOQ Group) | No |
| Bendigo Bank | Bank | Yes |
| Athena | Non-bank lender | No |
| Unloan | Digital lender (CommBank) | No |
There is no single cheapest lender for everyone, because rates depend on your LVR, loan size, purpose and repayment type. Digital and non-bank lenders often advertise lower variable rates than the big four, but compare the comparison rate for your loan amount and the features you need. For reference, the RBA's average rate on new owner-occupier variable loans was 6.24% in July 2026.
It changes with each repricing and depends on your circumstances. The major banks usually reserve their sharpest rates for borrowers with low LVRs, online applications or a package. Ask for each lender's key facts sheet for your loan amount and compare the comparison rates, then ask your current lender to match the best offer.
A single percentage that combines the interest rate with most upfront and ongoing fees, calculated for home loans on $150,000 over 25 years. It excludes some costs, such as government charges, redraw fees, early repayment or break costs and fee waivers, so it is true only for the example given.
On the RBA's July 2026 averages, owner-occupier fixed rates of up to three years averaged 6.25% and longer terms 6.86%, against 6.24% variable. A longer fix gives certainty for longer but costs more and exposes you to break costs for longer. This is general information, not advice.
It depends on your debts, expenses and the lender, but you can estimate the repayment. At 6.24% over 30 years, a $700,000 loan costs about $4,305 a month; at the APRA buffer rate of 9.24%, about $5,754. Lenders need to be satisfied you can afford the buffered repayment after your living costs and other debts.
About $4,921 a month at 6.24% over 30 years (principal and interest), or $4,797 at 6.00%. Use our mortgage repayment calculator for your own rate and term.
It would be below the RBA's July 2026 average of 6.24% for new owner-occupier variable loans. Whether it's good for you depends on the fees (check the comparison rate), the features and whether it is a fixed or discounted introductory rate.
We don't quote lenders' advertised rates: they change often, and we don't have a live feed. The averages above are the RBA's published figures for the month shown. This page is general information, not financial advice, and Better Rate Mate isn't a lender.
