Cheapest home loan rates: rate against true cost
Cheapest by rate and cheapest overall are two different things. A loan can win on the advertised number and still cost you more across the years you actually hold it.
The costs that sit outside the rate
- Application and establishment fees charged when the loan is set up.
- Annual or package fees charged every year for the life of the loan.
- Valuation and settlement fees, sometimes waived, sometimes not.
- Discharge fees when you leave a lender.
- Lenders mortgage insurance if you are borrowing above 80 per cent of the property value. This is usually the largest single cost and is often capitalised into the loan.
- Break costs if you exit a fixed rate early.
How to compare total cost honestly
Work out the interest you would pay over the period you realistically expect to hold the loan, then add every fee you would incur over that same period, including the cost of getting in and out. Compare that total against the same calculation for your current loan. The loan with the lower total is the cheaper loan, regardless of which has the lower headline rate.
Where the biggest savings usually sit
For most established borrowers, the largest available saving is not found by hunting for a marginally sharper advertised rate. It is found by closing the gap between an aged loan that has drifted above market and current pricing for that borrower profile.
See where your rate sits against the market in 60 seconds
Enter your loan balance, property value and current rate. You get an honest verdict with real numbers, even when the verdict is that you are already on a good deal.
Compare home loan rates nowRelated comparisons
- Home Loan Comparison: what to compare beyond the headline rate
- Mortgage Rate Comparison: how Australian lenders actually set your rate
- Best Home Loan Rates: why "best" depends on your profile
- Cheapest Home Loan Rates: headline rate versus true cost
- Lowest Home Loan Rates: who qualifies for the sharpest pricing
- Refinance Home Loan Rates: the break-even maths
- About RateSearch: who is behind this tool
This page provides general information only and does not take your objectives, financial situation or needs into account. It is not credit assistance, a credit quote, or an offer of finance. Any rate you are offered depends on a full assessment by a lender. RateSearch is operated by Mango Financial Group, an authorised credit representative (CRN 530027) of Finsure Finance and Insurance Pty Ltd, Australian Credit Licence 384704.