Key takeaways:
Compare more than the home loan interest rate. Check the comparison rate, fees, features and loan structure to get a broader picture of how a loan works and what it may cost.
Understand fixed, variable and split rates. Each offers different levels of repayment certainty and flexibility, with features and conditions varying between products.
Use the comparison rate as a guide. It includes the interest rate and certain fees, but it doesn't capture every cost or reflect your individual loan amount, term or circumstances.
Consider the loan term and features you'll actually use. Offset accounts, redraw, extra repayments and the loan term can affect how you manage the loan and how much interest you may pay.
Compare based on your circumstances. Your financial position, borrowing needs and lender eligibility criteria affect which home loan options are available and suitable.
Comparing home loan rates means looking beyond the lowest advertised rate.
Interest rates, comparison rates, fees, loan features and loan structure can all affect the cost of your loan and how it works for you. Whether you're buying a home, reviewing your current loan or considering refinancing, compare these:
Interest rate
Comparison rate
Fees
Features
Loan structure
Loan term
Lender eligibility
These factors work together. A lower interest rate may not mean a lower-cost loan if the product has higher fees, fewer useful features or restrictions that don't suit how you plan to manage your loan. The six steps below provide a consistent way to compare your options.
This guide explains how to compare home loan rates, costs, features and loan types so you can assess your options before buying or refinancing.
What are home loan interest rates?
A home loan interest rate is the percentage a lender charges on the money you borrow to buy or refinance a property. Interest is generally calculated on your outstanding loan balance, so your rate directly affects your interest costs and repayments. How much interest you pay can also depend on:
Loan balance: The more you borrow, the more interest you'll generally pay at the same rate.
Loan term: A longer term can reduce scheduled repayments but may increase the total interest paid over the life of the loan.
Repayment type: Principal and interest and interest-only repayments affect your loan balance and interest costs differently.
Extra repayments: Where permitted, additional repayments can reduce your outstanding balance and the interest charged over time.
Your interest rate is an important part of comparing home loans, but you shouldn't consider it in isolation. Read our guide to what home loan interest rates are to learn more.
You might also be interested in: Understanding home loan interest: How to reduce interest costs
What's the difference between fixed and variable home loan rates?
Home loans generally offer variable, fixed or split interest rates. The key difference is whether your rate can change, stays fixed for a set period, or combines both.
Rate type | How it works | What to consider |
|---|---|---|
Your interest rate can change over the life of the loan. | Repayments may rise or fall when your rate changes. Variable loans may also offer greater flexibility, depending on the product. | |
Your interest rate is fixed for an agreed period. | Provides repayment certainty during the fixed term, but restrictions and break costs may apply. A different rate will apply when the fixed period ends. | |
Your loan is divided between fixed and variable portions. | Provides certainty on part of your loan while the variable portion can change with interest rates. |
Remember, no single rate type suits every borrower. Consider how comfortable you are with changing repayments, how much certainty you want and which loan features matter to you. Features, fees and conditions vary between lenders and products.
Once you understand the main loan structures, you can compare individual products using the same criteria.
How do RBA cash rate movements affect home loan rates?
The Reserve Bank of Australia (RBA) sets a cash rate target, which influences interest rates across the economy, including home loan rates. However, the cash rate and your home loan interest rate are not the same. Lenders set their own rates based on factors including funding costs, competition and credit risk.
When the cash rate changes, lenders may adjust their variable home loan rates by different amounts or at different times. Existing fixed rates generally remain unchanged during the fixed period, while rates offered on new fixed loans can reflect funding costs and financial market expectations.
This is why it can be worth comparing home loans whether rates are rising, falling or unchanged. Aussie's Interest Rate Tracker tracks RBA decisions and announced rate changes across lenders on Aussie's panel.
You might also be interested in: The RBA interest rate decision for September 2026
Current home loan rate snapshot
As at 29 September 2026, the RBA has increased the cash rate target by 0.25 percentage points to 4.60%, which would be the fourth increase in 2026.
The latest available RBA lending data for July 2026 shows:
Owner-occupier loans | Average interest rate |
|---|---|
Outstanding loans | 6.19% p.a. |
New loans | 6.16% p.a. |
Source: RBA, Lenders' Interest Rates, July 2026. Figures include fixed and variable loans.
For example, a $500,000 principal-and-interest loan over 30 years at 6.16% p.a. would have indicative repayments of about $3,050 per month, assuming the rate remained unchanged for the full term and excluding fees.
Note: This example is illustrative only. The 6.16% figure is an average across new owner-occupier principal-and-interest loans, not a particular home loan product or a rate available to an individual borrower. Actual rates, repayments, fees and loan terms vary by lender, product and borrower circumstances.
You might also be interested in: Does the RBA influence interest rates?
What's the difference between the interest rate and the comparison rate?
When comparing home loans, check both the interest rate and the comparison rate. They measure different costs and can help you compare loans more effectively.
What it tells you | |
|---|---|
The rate used to calculate interest on your home loan balance. | |
Combines the interest rate with certain fees and charges into a single percentage, based on a standard loan amount and term. |
A lower interest rate doesn't necessarily mean a lower-cost loan. Higher fees can add to the cost, which is why the comparison rate is useful when comparing similar loans.
However, the comparison rate is only a guide. It doesn't include every fee or reflect your individual loan amount, term or circumstances, so your actual costs may differ.
What should you look at when comparing home loan rates?
The interest rate is only one part of a home loan comparison. The six steps below bring together the main factors to check, including the comparison rate, fees, features, loan structure, loan term and lender eligibility.
The aim is to compare similar loans consistently and understand which options may suit your borrowing needs, budget and financial circumstances.
Which tools can help you compare home loans?
Online calculators can help you compare home loan scenarios by showing how changes to your loan amount, interest rate or term could affect your repayments and borrowing position. Remember, results are estimates only and don't represent loan approval.
Use Aussie's Mortgage Repayments Calculator to estimate repayments for different loan amounts, interest rates and loan terms. Comparing scenarios can help you understand how changes to these inputs could affect your repayments.
Aussie's Interest Rate Change Calculator can estimate how an increase or decrease in your interest rate could change your home loan repayments. It can help you test different rate scenarios and understand the potential impact on your budget.
Use Aussie's Borrowing Power Calculator to estimate how much you may be able to borrow based on the financial information you provide. The result is a guide only. Your actual borrowing capacity will depend on the lender's assessment and lending criteria.
Aussie's Interest Rate Tracker tracks RBA cash rate decisions and announced home loan rate changes across lenders on Aussie’s panel, helping you keep up with recent rate movements.
Calculators and trackers are useful starting points, but they won't account for your circumstances. An Aussie Broker can help you work through the numbers and compare relevant home loan options.
How do you compare home loan rates?
A consistent comparison can help you assess home loan rates against your borrowing needs, budget and preferred loan features. Work through these six steps.
Step 1: Review your financial position
Start with your income, expenses, debts and savings to understand what you may be able to borrow and repay. Use our borrowing power calculator for an estimate. Your actual borrowing capacity will depend on the lender's assessment and lending criteria.
Step 2: Choose a loan structure
Consider whether a variable, fixed or split rate loan may suit your needs. Think about how much repayment certainty and flexibility you want, and how comfortable you are with your interest rate changing.
Your choice of structure can also affect which features, fees and repayment options are available, so check the full loan terms before applying.
Step 3: Compare home loan options
Compare loans using the same loan amount, loan purpose, repayment type and loan term. This makes it easier to assess the interest rate, comparison rate, fees, features and eligibility requirements consistently. Check the:
Advertised interest rate
The advertised interest rate is the rate used to calculate interest on the loan. It is an important starting point, but it does not show every cost associated with the product.
Comparison rate
The comparison rate combines the interest rate with certain fees and charges into a single percentage based on a standard loan amount and term. It can help you compare similar loans, but it does not include every fee or reflect your exact loan amount, term or circumstances.
Fees
Check for application or establishment fees, valuation fees, ongoing account or package fees, discharge fees, switching costs and any fixed-rate break costs that may apply.
A loan with a lower interest rate may still cost more overall if it has higher fees.
Features
An offset account may suit borrowers who keep regular savings and want access to their money. A redraw facility may suit borrowers who make additional repayments and are comfortable accessing those funds under the lender’s conditions.
Extra repayments may reduce your loan balance and the interest charged over time. However, limits or fees may apply, particularly during a fixed-rate period.
Eligibility and lending criteria
An advertised home loan may not be available to every borrower. Lenders may apply different criteria to income, employment, expenses, credit history, property type, loan purpose and LVR.
The most suitable option will depend on your borrowing needs, budget and financial circumstances.
Step 4: Estimate your repayments
Use our mortgage repayments calculator to compare different loan amounts, rates and terms. Testing several scenarios can show how changes to these inputs could affect your indicative repayments and budget.
You can also use the rate change calculator to test how an increase or decrease in your interest rate could affect your repayments.
A longer loan term generally means lower scheduled repayments but may result in more interest paid over the life of the loan.
Principal-and-interest and interest-only repayments also affect how quickly your loan balance reduces and what you may pay over time.
Calculator results are estimates only. They do not represent loan approval or guarantee the repayments, fees or costs that would apply to you.
Step 5: Speak with a broker
A broker can help you compare relevant lenders, loan structures and lending criteria.
An Aussie Broker can compare home loan options from 25+ lenders based on your circumstances and explain the differences between them. Not all lenders are available through all brokers.
Step 6: Consider home loan pre-approval
If you're preparing to buy, a home loan pre-approval can indicate how much a lender may be prepared to lend. Pre-approval is generally conditional and doesn't guarantee final approval. The lender will still need to assess your application and, where applicable, the property before providing unconditional approval. Learn more about home loan pre-approval.
You might also be interested in: 6 ways to make the most of home loan pre-approval
How should you compare home loan rates when refinancing?
When refinancing, compare your current home loan with the proposed replacement loan to understand what you could gain, lose and pay to switch. Consider:
Rates and fees: Compare your current rate and fees with the proposed loan's interest rate, comparison rate and applicable fees.
Switching costs: Check for discharge fees on your existing loan and any application, valuation or other upfront costs on the new loan.
Fixed-rate break costs: If you refinance during a fixed-rate period, break costs may apply.
Loan features: Check whether you'll gain or lose features such as an offset account, redraw or the ability to make additional repayments.
Remaining balance and term: How much you owe and how long you have left on your loan can affect the potential costs and benefits of refinancing.
New loan term: Extending your loan term may reduce scheduled repayments, but could increase the total interest paid by keeping you in debt for longer.
A lower advertised rate doesn't necessarily mean refinancing will cost less overall. Compare the potential interest savings against switching costs, fees, features and any change to your loan term.
What mistakes should you avoid when comparing home loan rates?
A meaningful home loan comparison looks beyond the headline rate. Before choosing a loan, check that you have:
Compared the advertised interest rate and comparison rate
Included upfront and ongoing fees
Checked whether the features are available and useful to you
Considered fixed-rate restrictions and break costs
Compared the same loan amount, term and repayment type
Checked eligibility and lender criteria
Considered the total cost over the period you expect to hold the loan
You might also be interested in: Can you save by refinancing to a lower rate?
Compare the whole home loan, not just the rate
The right home loan is not necessarily the one with the lowest advertised rate. Compare the rate, comparison rate, fees, features, loan structure and term together, then consider how each option fits your borrowing needs and financial circumstances.
An Aussie Broker can help you compare relevant home loan options from 25+ lenders and explain the trade-offs between rates, fees, features and loan structures.