Home loan comparison calculator

Comparing home loans is a crucial first step towards a new home, investment property or simply a new home loan if you’re refinancing. Without a comparison of different home loan options, you likely won’t know which home loan types could suit you, let alone which ones are worth looking into; how are you meant to decide between a fixed rate home loan or a variable rate home loan if you haven’t compared how they stack up against each other overall?

Comparing home loans is a crucial step in any borrower’s home loan journey, and the process of researching and comparing home loans can give you the time and space necessary to flesh out your own understanding of your financial situation and priorities.

For example, after looking at a few different home loans, you might decide a smaller loan amount may be more suited to your circumstances, or that an offset account is a non-negotiable feature for you. You can compare for yourself, which you can do by using our home loan comparison calculator!

Comparison rates will be one of the most useful pieces of information you’ll be given when exploring your home loan options. A home loan’s comparison rate represents its true cost; it’s calculated using the interest rate plus any additional costs of the home loan, including any regular fees and charges.

Be sure to weigh up different comparison rates when you’re comparing home loans! A comparison rate can tell you a lot about a specific home loan, but comparing different comparison rates from different financial institutions will help you evaluate them using the same basic criteria.

Overall cost isn’t the only factor to think about when figuring out whether a home loan offers you value or not. A home loan’s monthly repayment amounts could be smaller overall than its competitors, but it might not offer potentially valuable features like an offset account or repayment flexibility.

To put it another way, a home loan that suits you should come with both the features you’re looking for and at an interest rate that’s palatable to you. A home loan that doesn’t offer both may not be a good fit for your financial situation and priorities.

An introductory rate is a promotional interest rate offered by a lender to try and incentivise new home loan customers. The length of the introductory rate period will vary, but be sure to check the revert rate (the interest rate that you’ll be charged once the introductory rate period ends).

It’s worth noting that an attractive introductory rate doesn’t necessarily make for good value over the life of the loan, and that you should consider any given home loan product on its full range of pros and cons – not just an attractive sign-up deal.

When comparing home loans, you may want to try and keep the following points in mind:

• Type of home loan. Start simple; do you want a fixed interest rate home loan or a variable interest rate home loan, and will the home loan be for an owner-occupied home or an investment property? These are some of the more foundational loan details you’ll want to figure out sooner rather than later.
• Fees. Does it come with an upfront establishment fee or application fee? How expensive are the ongoing fees? You’ll want a clear picture of the annual fees and charges that any given home loan will involve.
• Repayment frequency and flexibility. Do you want to make weekly, fortnightly or monthly home loan repayments? Does the home loan in question allow for extra repayments? These are important questions you’ll want answers to.
• Repayment type. Will you want a conventional principal & interest home loan, or would you like to make interest-only home loan repayments for a few years?

You may also want to discuss your needs and goals with a mortgage broker or financial advisor, as they’ll likely be able to help you zero in on the home loan features and details that are right for you, and ultimately help you make a more informed financial decision.

Home loans will sometimes be advertised as ‘low-rate’ or ‘low-fee’, but one isn’t necessarily better than the other. You’d have to compare the home loans in question to see which of your options offers you better value in the long run.

When comparing home loans based on their interest rates, it’s easy enough to figure out which loans come with friendlier rates attached, and subsequently which home loans you’d pay less total interest on.

It’s also worth noting that a lower home loan rate may see your borrowing power increase. This isn’t inherently a bad thing, but borrowing significantly more could push your loan-to-value ratio (LVR) higher, and potentially result in you having to pay lender’s mortgage insurance (LMI).

And when it comes to comparing home loans based on fees, lower isn’t always better.

This is because a home loan’s fees will typically be at least somewhat representative of the loan’s feature offerings. A bare-bones home loan with few or no features will likely have lower annual and upfront fee than a home loan that comes full to the brim with features. But that doesn’t necessarily make the cheaper home loan better than the more expensive home loan.

The question of which loan is ‘best’ or ‘right’ for you can only be answered by you (potentially with the help of a financial advisor or mortgage broker) based on your own understanding of your financial goals, wants and needs.  

Home loans will generally come with a Key Fact Sheet (KFS) summarising the product and estimating its cost to you over the loan term. This is usually a good place to start if you’re looking for more detailed information on a specific home loan product.

Other financial products, including car insurance, health insurance, personal loans and credit cards, generally come with what’s called a Product Disclosure Statement (PDS). These function similarly to a KFS but are generally much more detailed.