What is a Good Home Loan Rate in Australia?

The Live Benchmark By Borrower Profile

There is no single "good rate" that fits everyone. Owner occupiers pay less than investors, principal and interest borrowers pay less than interest only, and the sharpest rate always comes from a small handful of lenders rather than the whole panel. The table below shows the lowest variable rate currently available across Lendera's 60+ lender panel for each of the four main borrower profiles. The numbers are refreshed from our rate database on each site rebuild, so what you see here is what is actually being offered right now.

These are the sharpest advertised rates on panel at 80% LVR or lower for a $500,000 loan. Individual lenders offering the lowest rate vary by month and by profile, but the lowest tier is almost always held by non bank lenders and a handful of smaller banks competing aggressively on price.

What "Good" Actually Means For You

A useful rule of thumb: measure your current rate against the lowest rate available for your exact profile.

• Within 20 basis points of the lowest: you have an excellent rate. Nothing to do.
• 20 to 40 basis points above the lowest: you have a competitive rate. Worth a check at your next review but not urgent.
• 40 to 70 basis points above the lowest: you are paying more than you need to. A rate review is likely to save you money.
• 70 basis points or more above the lowest: you are significantly overpaying. Refinancing or demanding a discount from your current lender is almost always worth it.

On a $500,000 loan, every 0.25% you overpay is roughly $1,250 per year in extra interest, or about $37,500 over a 30 year loan term. On a $1 million loan the numbers double. The gap between the lowest rate on panel and what most Big 4 customers are actually paying is typically 40 to 70 basis points. Our Big 4 vs non bank comparison explains why this gap exists and what to do about it.

How To Check If Your Rate Is Good

Three minute check:

1. Find your current rate. It is on your most recent loan statement or your internet banking.
2. Identify your profile. Owner occupier or investor. Principal and interest or interest only. That picks the right row in the table above.
3. Calculate the gap. Subtract the lowest rate for your profile from your current rate. Anything above 40 basis points means a rate review is likely to save you money.

For a precise comparison tailored to your LVR, loan amount and situation, use Lendera's free rate comparison tool. It returns the specific rates you qualify for across 60+ lenders in under two minutes. The tool reads the same rate database that powers the numbers on this page.

Factors That Affect The Rate You Are Offered

The benchmarks above are the starting point. Your actual rate depends on several factors that lenders use to price risk and reward.

• Loan to value ratio (LVR). The biggest single factor. Rates at 60% LVR or lower are typically 10 to 30 basis points sharper than rates at 80% LVR. Rates above 80% LVR attract LMI and a rate loading.
• Loan size. Some lenders offer lower rates for loans above $500,000 or $750,000 to attract higher value borrowers.
• Repayment type. Principal and interest is always cheaper than interest only for the same product, usually by 30 to 50 basis points.
• Owner occupier vs investor. Owner occupier is cheaper by 20 to 30 basis points in most cases.
• Borrower profile. PAYG income, strong credit history and clean living expenses secure the sharpest rates. Self employed, complex income or adverse credit will face a premium.
• Features. Full feature products with offset and unlimited redraw cost more than basic no feature products. Some non bank lenders offer the sharpest rates by stripping features out.

Vish

Founder and Licensed Mortgage Broker

Vish studied medicine and law at the University of Sydney before switching to finance broking after no one would help him get a loan for his first property. He bought 3 properties before turning 24 and started Lendera because he believes borrowers deserve transparency, not gatekeeping. You can compare rates from 60+ lenders without entering any personal details, access the Home Loans Academy and first home buyer and refinancing checklists at no cost, and speak to his team of brokers when you are ready.

Read more about Vish and the Lendera team →