Nowadays, Australia is teeming with numerous lenders vying to proffer home loans at exciting rates and terms. This may make securing a home loan super easy for you. However, choosing the right one is a daunting task, as even slight differences in charges and interest rates can literally save you thousands of dollars in repayments and years off your mortgage.
Moreover, choosing the best home loan in Australia may differ from person to person, considering their unique financial situations. That’s why it’s essential to conduct thorough research and understand the features and charges of your available options. Thereby you can smartly pinpoint a home loan that perfectly aligns with your unique financial requirement and situation. Hence, to make your homeownership journey a bit easier, Urban Money presents a selection of the 10 Best Home Loans Australia 2023. Our home loan experts have carefully chosen and evaluated these options based on factors such as mortgage fees, features, and interest rates.
Top Home Loan Lenders in Australia for 2023
Finding the best bank for home loans requires extensive research and analytics. To evade those tedious tasks, you can follow this list of leading lenders available now in Australia.
| Lender | Rate | Fee |
| Unloan | 5.74% p.a. variable interest rate (5.65% p.a. comparison rate) | No application or ongoing fees |
| Macquarie | 5.89% p.a. variable interest rate (5.91% p.a. comparison rate) | $0 annual fee for the first year, then $395 p.a. |
| Loans.com.au | 5.79% p.a. variable interest rate (5.81% p.a. comparison rate) | $530 upfront fee |
| Qudos Bank | 6.69% p.a. Variable interest rate (6.73% p.a. comparison rate) | No application or ongoing fees |
| UBank | 5.84% p.a. variable interest rate (5.86% p.a. comparison rate) | No application or ongoing fees |
| Tic:Toc | 5.69% p.a. variable interest rate (5.70% p.a. comparison rate) | $300 settlement fee |
| Heritage Bank | 5.79% p.a. variable interest rate (5.81% p.a. comparison rate) | Application fees and ongoing fees are applicable. |
| ING | 5.84% p.a. variable interest rate (5.86% p.a. comparison rate) | $300 settlement fee; $220 valuation fee |
| Bendigo Bank | 6.04% p.a. variable interest rate (6.26% p.a. comparison rate) | Application fee $150; Settlement Fee $100; Document Preparation Fee $100 – $600. |
| P&N Bank | 6.54% p.a. variable interest rate (6.98% p.a. comparison rate) | Application fees and ongoing fees are applicable. |
Unloan
Unloan is a digital-only home loan made by CommBank. It is designed to be simple, low-cost, and rewarding for customers who seeking the best home loan Australia. Unloan offers variable interest rates starting at just 5.74% p.a., whereas the comparison rate is 5.65% p.a. Customers can borrow loan amounts ranging from $10,000 to $10,000,000, with a maximum loan-to-value ratio (LVR) of 80%, and a loan term of 30 years. Notably, Unloan does not charge any application fees, discharge fees, account-keeping fees, transaction fees, late payment fees, or early termination fees. It also does not have any additional repayment penalties or redraw penalties.
Macquarie
Macquarie home loan is offered by Macquarie Bank, one of the largest banks in Australia. Macquarie grants customers complete freedom to tailor their loans that suit their needs. Namely, customers can choose from flexible loan options such as splitting between variable and fixed interest rates, adding an offset account, or choosing a low-fee basic home loan. Customers can also borrow from $10,000 to $10,000,000 with a maximum loan-to-value ratio (LVR) of 80%. The loan term can be up to 30 years, with the option to choose weekly, fortnightly, or monthly repayments. Moreover, Macquarie home loan also does not charge any application fees, discharge fees, account-keeping fees, transaction fees, late payment fees, or early termination fees. And customers can make additional repayments or redraw funds at any time without penalty. The variable rate commences at 5.89% p.a., and the comparison rate is 5.91% p.a. On the other hand, the fixed interest rate stands at 5.85% p.a., with a comparison rate of 5.90% p.a.
Loans.com.au
Loans.com.au home loan is offered by an online-only lender that operates as part of the Firstmac Group, which has 40 + years of experience in the home loan industry and manages over $13 billion in mortgages. This allows customers to choose from various loan options such as offset accounts, redraw facilities, split loans, and interest-only periods. Customers can borrow from $50,000 to $2,000,000 with a maximum loan-to-value ratio (LVR) of 90%. Notably, it does not charge any additional fees except a one-off settlement fee of $300 and a valuation fee of $230. Moreover, it offers both variable and fixed rates. The variable rate commences at just 5.79% p.a.. The comparison rate is 5.81% p.a. Alternatively, the fixed interest rate stands at 6.04% p.a., with a comparison rate of 6.43% p.a.
Qudos Bank
Qudos Bank, a customer-owned bank that has been operating since 1959, offer appealing home loan featuring both variable and fixed interest rates. The variable rates start at 6.69% p.a. with a comparison rate of 6.73 p.a.. In contrast, the fixed rate stands at 5.69 p.a. accompanied by a comparison rate of 5.91% p.a. Furthermore, customers can borrow loan amounts ranging from $10,000 to $10,000,000, all within a maximum loan-to-value ratio (LVR) of 80%. And Qudos Bank home loan does not charge any application fees, discharge fees, account-keeping fees, transaction fees, late payment fees, or early termination fees.
UBank
This low rates and no fees home loan is offered by UBank, which is a part of the National Australia Bank Group. It offers both variables and fixed rates. The variable rate starts at 5.84% p.a. with a comparison rate of 5.86% p.a. On the other hand, the fixed rate is 6.33% p.a. with a comparison rate of 6.22% p.a. Moreover, customers have the flexibility to borrow amounts ranging from $10,000 to $10,000,000 within a maximum loan-to-value ratio (LVR) of 80%. Notably, UBank’s offering does not entail any application fees, ongoing fees, or early repayment fees.
Tic:Toc
To the aid of AI Tic:Toc offers a cutting-edge online home loan experience. Customers can secure conditional approval within minutes and full approval within 48 hours. Like many other leading home loan lenders, Tic:Toc also offers both variable and fixed rates. The variable rate starts at 5.69% p.a. with a comparison rate of 5.70% p.a. Alternatively; the fixed rate is 6.09% p.a. with a comparison rate of 5.81% p.a. Moreover, customers enjoy the flexibility to borrow loan amounts ranging from $50,000 to $10,000,000 within a maximum loan-to-value ratio (LVR) of 80%. Notably, there is a one-time settlement fee of $395 and a valuation fee of $250. Apart from these, no additional charges will be imposed on you.
Heritage Bank
Heritage Bank home loan is offered by Heritage Bank, a customer-owned bank that has been operating since 1875. This bank offers both variable and interest rates. The variable rate begins at 5.79% p.a. with a comparison rate of 5.81% p.a. In contrast, the fixed rate is 6.09% p.a. with a comparison rate of 7.91% p.a. Customers can borrow loan amounts ranging from $10,000 to $10,000,000 with a maximum loan-to-value ratio (LVR) of 80%. It also does not impose any additional charges such as application fees, discharge fees, account-keeping fees, transaction fees, late payment fees, or early termination fees.
ING
ING Bank home loan is offered by an online-only lender, which is a part of the Dutch multinational ING Group. This loan product encompasses both variable and fixed interest rates. The variable rate commences at 5.84% p.a., with a corresponding comparison rate of 5.86% p.a. On the other hand, the fixed rate stands at 6.14% p.a., accompanied by a comparison rate of 6.00% p.a. Customers can borrow from $10,000 to $10,000,000 with a maximum loan-to-value ratio (LVR) of 90%. Moreover, while there is a one-time settlement fee of $300 and a valuation fee of $220, there are no application, ongoing, or early repayment fees.
Bendigo Bank
Bendigo Bank home loan is offered by Bendigo Bank, a customer-owned bank that has been operating since 1858. This bank offers its customers both variable and fixed-rate options. The variable rate starts at 6.04% p.a. with a comparison rate of 6.26% p.a. Alternatively; the fixed rate is 6.29% p.a. with a comparison rate of 6.47% p.a. Moreover, customers can borrow loan amounts ranging from $10,000 to $10,000,000 with a maximum loan-to-value ratio (LVR) of 90%. Notably, this loan is subject to certain charges, including a $150 application fee, a $100 settlement fee, and a document preparation fee ranging from $100 to $600, among others. A comprehensive overview of the fee structure can be found on the official website of Bendigo Bank.
P&N Bank
P&N Bank is a member-owned financial institution that provides a variety of home loan options for Australian borrowers. The bank offers both variable and fixed rates. The variable rate starts at 5.79% p.a. with a comparison rate of 5.80% p.a. On the other hand, the fixed rate is 6.39% p.a. with a comparison rate of 6.24% p.a. Moreover, customers enjoy the flexibility to borrow loan amounts ranging from $50,000 to $10,000,000, within a maximum loan-to-value ratio (LVR) of 80%. Notably, there is a one-time settlement fee of $395 and a valuation fee of $250. Apart from these, no additional charges will be imposed on you.
Comparing Fixed-Rate and Variable-Rate Home Loans
The following compares the fixed interest rates and variable interest rates of the best home loans in Australia.
| Lender | Fixed-rate | Variable-rate |
| Unloan | Nil | 5.74% p.a. |
| Macquarie | 5.85% p.a. | 5.89% p.a. |
| Loans.com.au | 6.04% p.a. | 5.79% p.a. |
| Qudos Bank | 5.69 p.a. | 6.69% p.a. |
| UBank | 5.84% p.a. | 6.33% p.a. |
| Tic:Toc | 6.09% p.a. | 5.69% p.a. |
| Heritage Bank | 6.09% p.a. | 5.79% p.a. |
| ING | 6.14% p.a. | 5.84% p.a. |
| Bendigo Bank | 6.29% p.a. | 6.04% p.a. |
| P&N Bank | 6.39% p.a. | 5.79% p.a. |
The Benefits of Refinancing Your Home Loan in 2023
Refinancing is an option people have to secure a lower interest rate, better terms, debt consolidation, and more. However, if you can find any of the best banks for home loan refinancing, you can avail of the benefits mentioned below.
- Due to your property’s value increase, you deserve better terms and rates.
- You can lower your home loan repayments.
- Your fixed rate or interest-only period might end, and your interest rate could revert to the standard variable rate.
- You can afford to pay more to pay off your loan quicker.
- You can consolidate other loans (including credit cards)
- You want to increase your loan amount and take cash out
- You like to do some renovations or a bit of construction at your home.
Factors That Influence Home Loan Approval and How to Improve Your Chances
Following are the factors that influence home loan approval and how to improve your chances, suppose you failed to meet minimum eligibility:
- Maintain a Positive Credit Score: Your credit score matter tremendously. Typically, banks consider a credit score of 650 to 700 or above as favourable. However, paying your bills and existing loans on time along with reduced credit card utilisation can help you gradually enrich your credit score.
- Live Within Your Means: During the lenders evaluate your application, they scrutinise your bank statements and living expenses to assess your affordability and spending habits. Hence, it is advisable to reduce unnecessary or excessive costs and maintain sensible spending for at least three to six months before you apply.
- Affix Co-Applicant: Incorporating your spouse, sibling, or other close family members as co-applicants can significantly improve your chances of loan approval. In such cases, the bank assesses the financial capacity of both you and your co-applicants and considers your application as less risky, often resulting in better rates and terms.
- Reduce Your Debt-to-Income Ratio: The debt-to-income ratio shows the lender how much of your monthly income is used to pay off your debt. A higher debt-to-income ratio indicates that you have fewer funds available to repay the loan, which could lead lenders to reject your loan application. Typically, you can reduce the debt-to-income ratio by increasing your income or decreasing your debts.
- Present All Your Income Sources: You should disclose all your sources of income in addition to your monthly salary. This may include various passive incomes such as investments, rental properties, retail businesses, income-generating hobbies, and more. By doing so, lenders gain more confidence in your ability to repay the loan, ultimately enhancing the chances of loan approval.
Home Loan Options for First-Time Buyers and Low-Income Borrowers
Here under you can find the best bank for home loans in Australia for first-time buyers and low-income borrowers. Notably, these loans are insured by the Australian government. I.e., these loans are featured lower interest rates, less down payment, and minimal eligibility/document requirements, than conventional loans.
- Federal Housing Administration (FHA) loans
- Veterans Affairs (VA) Loans
- Federal Housing Administration (FHA) Loans
- United States Department of Agriculture (USDA) loans.
- Zero-Down Home Loans With Private Lenders
How to Compare and Choose the Best Home Loan for Your Needs ?
You can follow these steps to compare and locate the best bank for home loan in Australia:
- Interest Rates: A percentage of the principal (the total loan amount) that the lender charges from the borrower. It can differ based on factors such as the type, duration, and features of the home loan, as well as the borrower’s creditworthiness and market conditions.
- Comparison Rate: It is the aggregate rate of fees and charges, including the interest rate, that the lender imposes on you for loan services. Reviewing this rate gives you a total idea of the fees and charges on your home loan.
- Monthly Repayment Amount: This is the amount of money that you are required to pay to the lender monthly vice. And you should ensure that this monthly repayment amount is within your means.
- Annual Fees: If your home loan is associated with special discounts within a package home loan, your lender might impose an annual fee. So, it is advisable to be aware of these fees before applying. Notably, not all lenders charge an annual fee.
The Future of the Home Loan Market in Australia and How It May Affect Borrowers
Here are some of the key trends and challenges that may affect borrowers due to securing the best home loans in Australia:
- Interest Rates are Rising: Due to the strong economic recovery and inflationary pressures, RBA has been continuously raising the cash rate. Hence, it is reasonable to expect a higher interest rate in future.
- Investor Lending Will Grow: As investors seek to take advantage of high-interest rates, investor lending become more prevailed in the market.
- Surging Immigration: As per the report of the Australia Home Affairs Department, the immigration rate would be rising in future. As a result, the demand and supply of housing loans are expected to be higher.
Digital Technology Will Innovate: In the future, securing a loan would be simpler, quicker, and more streamlined. This could enhance feasibility for those seeking home loans, as well as offer more choices and competition in the market.