Mortgage rate comparison, explained properly
Two borrowers can walk into the same lender on the same day and be offered different rates. Understanding why is the difference between comparing mortgage rates usefully and comparing marketing.
What sets Australian mortgage rates
The Reserve Bank cash rate sets the floor, but it is only one input. Lenders also price against their own funding costs, their appetite for a particular type of lending at a particular time, and the risk profile of the individual loan.
This is why rate movements are not uniform. A lender chasing owner-occupier growth may sharpen those rates while leaving investor pricing untouched.
Risk-based pricing: why your rate is personal
Most lenders price in bands rather than offering one rate to everyone:
- Loan-to-value ratio. Borrowing a smaller share of the property value typically unlocks a better rate. The tiers commonly step at 60, 70, 80 and 90 per cent.
- Loan purpose. Investment lending is usually priced above owner-occupied lending.
- Repayment type. Interest-only lending generally carries a premium over principal and interest.
- Loan size. Some lenders price larger loans more sharply.
Fixed against variable
A fixed rate buys certainty for a defined term. A variable rate keeps flexibility, including the ability to make extra repayments or refinance without break costs. Neither is inherently better. The right choice depends on how much certainty you need and how likely you are to change the loan during the fixed period.
Comparing rates against your actual position
A rate table tells you what exists. It does not tell you whether you would be approved for it, or whether moving would leave you better off after costs. That requires comparing against the specific loan you hold today.
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.