Are you thinking of buying a property in Australia, but not sure of the Australian mortgage options that are available for you? Are you also thinking about staying in the house you’re purchasing in Australia or are you buying it for investment purpose? Don’t worry, we’re here to help you break down the differences between owner-occupier and investment-related home loan and their interest rates. We’re also going to compare the interest rates offered by the four major Australian banks: CBA, ANZ, NAB, and Westpac*. Know about lowest interest rate home loan Australia.

commonwealthbank_logo

Variable rate loans

6.89% basic

6.64-6.49% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.64% 1 year

6.89% 2 year

6.64% 3 year

6.79% 4 year

6.79% 5 year

^Add 0.15% margin if not on the package.

ANZ Logo

Variable rate loans

6.84% basic

6.61-6.46% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.89% 1 year

6.69% 2 year

6.69% 3 year

6.94% 4 year

7.04% 5 year

^Add 0.15% margin if not on the package.

NAB Logo

Variable rate loans

7.36% basic

6.59-6.44% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.89% 1 year

6.79% 2 year

6.79% 3 year

6.89% 4 year

6.94% 5 year

^Add 0.10% margin if not on the package.

Westpac Logo

Variable rate loans

6.74>70% 2 years

6.52-6.37% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.79% 1 year

6.59% 2 year

6.79% 3 year

6.79% 4 year

6.89% 5 year

^Add 0.20% margin if not on the package.

commonwealthbank_logo

Variable rate loans

6.79% basic

6.34-6.19% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.59% 1 year

6.84% 2 year

6.59% 3 year

6.69% 4 year

6.69% 5 year

^Add 0.15% margin if not on the package.

ANZ Logo

Variable rate loans

6.64% basic

6.27-6.12% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.69% 1 year

6.54% 2 year

6.59% 3 year

6.74% 4 year

6.84% 5 year

^Add 0.15% margin if not on the package.

NAB Logo

Variable rate loans

6.84% basic

6.34-6.19% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.74% 1 year

6.64% 2 year

6.64% 3 year

6.79% 4 year

6.84% 5 year

^Add 0.10% margin if not on the package.

Westpac Logo

Variable rate loans

6.44<70% 2 yr

6.25-6.1% packaged*

*This is the standard broker negotiated rate.

 

Fixed-rate loans^

6.69% 1 year

6.59% 2 year

6.69% 3 year

6.69% 4 year

6.79% 5 year

^Add 0.20% margin if not on the package.

Assumptions:

  • Mortgage rates can change daily.
  • Interest rates shown are for Principal & Interest repayments (P&I) only.
  • Actual loan payments will vary based on your individual situation and current rates.
  • Some products may not be available in different countries.
  • CBA, ANZ, NAB, Wesptac products may not be available to foreign nationals.
  • Lending services may not be available in some areas.
  • Some restrictions may apply.
  • Based on the purchase/refinance of the applicant at settlement.
  • The fixed-rate will revert to a variable rate at the end of the fixed-rate period.
  • The fixed-rates shown are for the ‘packaged’ loan products, and annual package fees may apply.
  • Interest rates shown are for 70-80% LVR band.
  • If LTV > 80%, LMI will be added to your monthly mortgage payment and rates will increase.
  • Please remember that we don’t have all your information. Therefore, the rate and repayment results you see from this calculator may not be reflective of your actual situation. Odin Mortgage offers a wide variety of loan options. You may still qualify for a loan even if your situation doesn’t match our assumptions. To get more accurate and personalised results, please call to talk to one of our mortgage experts.

Find Lowest Interest Rate Home Loan in Australia

Overview:

  • CBA is the largest bank in Australia with $461bn in current outstanding housing loans, $158bn of which are Investment lending.
  • A quarter of all home loans are with the Commonwealth Bank although it’s worth noting that CBA acquired Bankwest (Bank of Western Australia) in 2008 for $2.1bn and this has been factored in.
  • Open to Australian expats with a wide range of acceptable scenarios, however, an incredibly policy-driven lender with harsh servicing criteria. So, either you meet their policies or you don’t – there are few exceptions.

What home loan products do CBA have?

CBA’s main home loan is the Wealth Package (also known as the Mortgage Advantage Package – MAV). For a standard $395 annual fee you’ll receive interest rate discounts on their standard variable or fixed rate product, waived application fees, and a 100% offset transaction account.

When it comes to your Australian mortgage options, the Wealth/MAV Package is typically recommended for loans over $250,000.

For smaller loans, the Extra Home Loan is a better choice that includes interest-only arrangements. These have fewer features, but also fewer fees, in particular no annual package fee.

CBA also has a range of fixed-rate home loans with the most common being 1 – 5 years. 1 – 3 years being the most popular due to the lower relative rate.

How do CBA’s home loans compare?

Pros

  • Accepting of the majority of foreign currency income.
  • Can borrow above 80% for overseas residents (LMI payable).
  • People buying in rural areas, company-title, serviced apartments.
  • Market-leading internet and mobile banking platform.
  • Open to uncommon or complicated loan scenarios.
  • They have the largest Australia-wide ATM and branch network.
  • They can offer refinance rebates and cashbacks.
  • They have features like multiple free offset accounts, redraw, split loans, top-ups, flexible repayments and repayment holidays.
  • Can lend to companies or trust entities.

Cons

  • One of the toughest servicing assessments for foreign income applications.
  • Will apply Australian income tax rates on your foreign income when assessing your borrowing capacity.
  • Very policy-driven bank. You will need to meet every policy to get approved. Rare to gain exceptions.

Overview:

  • ANZ is one of Australia’s four major banks with $260bn in household lending,  $86m of which is in Investment lending.
  • ANZ is the second largest bank by assets and the third largest by marketing capitalisation in Australia.
  • Open to Australian expats with relatively harsh servicing criteria. Popular in the past several months due to competitive rates, but has a cumbersome, bureaucratic post-approval settlement process.

What Australian mortgage options do ANZ have?

ANZ’s flagship product is their Breakfree package which is ideal for loans over $250,000.

This package gives you rate discounts on variable & fixed-rates, waived fees on your account, credit card, and application fees. You’ll need to pay an annual fee of $395 but generally, the interest savings and flexibility are usually worth the ongoing cost.

For smaller loan sizes, the optimal product is the Simplicity Plus loan which doesn’t have an offset account but there is no annual fee. A variable home loan option like this also offers interest-only repayments, discounted fees, and more.

ANZ also has a range of fixed-rate home loans with the most common being 1 – 5 years. 1 – 3 years being the most popular due to the lower relative rate.

How do ANZ's home loans compare?

Pros

  • Accepting of the majority of foreign currency income.
  • Can borrow up to 80% for overseas residents
  • Can order valuations upfront prior to application submission.
  • Market-leading internet and mobile banking platform.
  • Open to uncommon or complicated loan scenarios.
  • They have one of the largest Australia-wide ATM and branch networks.
  • They can offer refinance rebates and cashback.
  • They have features like free offset accounts, redraw, split loans, top-ups, flexible repayments and repayment holidays.
  • Can lend to trust entities.

Cons

  • One of the tougher servicing assessments for foreign income applications.
  • Will apply Australian income tax rates on your foreign income when assessing your borrowing capacity.
  • Very policy-driven bank. You will need to meet every policy to get approved. Rare to gain exceptions.
  • Won’t accept foreign rental income as part of your income.

Overview:

  • NAB is one of the big four Australian banks with an aggregate lending portfolio of $260bn, of which $103bn is Investment lending.
  • NAB was once an active participant in the non-resident lending space; however, since 2016, they’ve shown low interest in serving the expat community with the toughest servicing yet out of the big four.

What home loan products do NAB have?

NAB’s Choice Package is their most popular home loan product if you’re borrowing more than $250,000, and offers interest-only repayments.

You’ll pay an annual fee in return for a lower interest rate for the life of the loan in addition to discounts on a range of banking products such as an offset account and credit card.

​NAB’s Base Variable Rate Home Loan is a good choice for loans under $250,000 as there’s no annual fee, but no offset account. This home loan option is available for interest only, principal and interest, and more loan types.

In terms of other Australian mortgage options, NAB also has a range of fixed-rate home loans with the most common being 1 – 5 years. 1 – 3 years being the most popular due to the lower relative rate.

How do NAB's home loans compare?

Pros

  • Accepting of major foreign currency income.
  • Can borrow above 80% for overseas residents.
  • Market-leading internet and mobile banking platform.
  • Open to uncommon or complicated loan scenarios.
  • Has one of the largest Australia-wide ATM and branch networks.
  • They can offer refinance rebates and cashbacks.
  • They have features like free offset accounts, redraw, split loans, top-ups, flexible repayments and repayment holidays.

Cons

  • Has the toughest servicing assessment out of the big four for foreign income applications.
  • Will apply Australian income tax rates on your foreign income when assessing your borrowing capacity.
  • Very policy-driven bank. You will need to meet every policy to get approved. Rare to gain exceptions.

Overview:

  • Westpac is the second largest bank in terms of household lending in Australia sitting at $405bn in outstanding loans, with $177bn of that in Investment lending.
  • In 1997, Westpac acquired Bank of Melbourne In 2008, Westpac acquired St.George Bank
  • Generally an approving bank to expats, however, it is St. George bank (Westpac’s 2008 acquisition) who takes the majority of this bank’s non-resident applications due to more favourable servicing

What Australian mortgage options does Westpac have?

Westpac’s Premier Advantage Package is their featured loan product.

For an annual package fee of $395, you will get a fully-featured home loan with an offset account and discounted interest rates.

Westpac’s Flexi First Option Home Loan is their basic variable loan without an offset account and no annual fee. This home loan plan offers principal and interest as well as interest-only repayment types, their lowest variable rates, and more. Best for smaller loan sizes, usually under $250,000.

Westpac also has a range of fixed-rate home loans with the most common being 1 – 5 years. 1 – 3 years being the most popular due to the lower relative rate.

How do Westpac's home loans compare?

Pros

  • Accepting of the majority of foreign currency income.
  • Market-leading internet and mobile banking platform.
  • Open to uncommon or complicated loan scenarios.
  • Has one of the largest Australia-wide ATM and branch network.
  • They have features like free offset accounts, redraw, split loans, top-ups, flexible repayments and repayment holidays.
  • May consider family guarantors.

Cons

  • One of the tougher servicing assessments for foreign income applications.
  • Will apply Australian income tax rates on your foreign income when assessing your borrowing capacity.
  • Very policy-driven bank. You will need to meet every policy to get approved. Rare to gain exceptions.
  • Won’t do refinances.
  • Maximum 70% LVR.

Allow us to find you the perfect home loan.

Apply online to get expert recommendations with real interest rates and repayments.

The Reserve Bank of Australia (RBA) vs Mortgage interest rate – Trend graph

As of June 2023, the Reserve Bank of Australia (RBA) has decided to increase the cash rate by 25 basis points. This has brought it to 4.10 per cent, an all-time high since 2012!

As mentioned in Governor Philip Lowe’s official statement, “Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range. This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe.”

“The Board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”

What does this all mean? Essentially, the RBA is committed to doing whatever is necessary to return inflation back to the target, meaning you may need to wait a while longer before we see the banks start to cut interest rates. If you are on a seemingly high rate now, please reach out to our team of mortgage professionals to review your lender options for the most competitive rates on the market.

Other countries interest rate - Trend graph

Finding the best home loan interest rates in Australia

The mortgage rates listed above are the currently available rates for these Big Four (ANZ, CBA, NAB, Westpac) mortgage loan options. These aren’t necessarily the mortgage rates you’ll get when you apply, and often the lesser-known lenders may have sharper rates. 

Your mortgage rate depends on many factors, such as your nationality, credit score, loan amount, and loan-to-Value-Ratio (LVR).

The most accurate way to see what your mortgage rate could be is to speak with a home loan expert or apply online with Odin Mortgage. After you provide some basic information, we’ll recommend you a loan option and mortgage rate that meet your financial goals.

How do you compare home loans?

It’s essential to match your mortgage to your financial goals. One of the main factors to consider is whether you’re an owner-occupier or a property investor.

Owner-occupier home loans typically have the cheapest rates, as the borrower is living in the property and is seen as a lower risk by the lender. However, if you’re a property investor, you’ll need to look for an investment loan with different features and requirements. 

It’s also important to consider the type of loan you need. Most borrowers prefer a principal-and-interest loan, whose repayments include the principal amount borrowed and the interest charged. However, some investors may benefit from an interest-only loan, where they only have to pay the interest charged for a specified period.

It’s also important to consider the features that are available to you. For example, if you want the flexibility to make extra repayments, you’ll need to look for a loan that offers this feature. If you want the security of knowing you can access any additional funds you’ve paid towards your loan, you’ll want to look for a loan with a redraw facility.

Finding the right loan type for your needs is about balancing your priorities and requirements. By taking the time to consider your options and compare loans from different lenders, you can find a loan that matches your specific borrowing needs and helps you achieve your financial goals.

Here are some goals you may have and the mortgage loan options that could help you reach them.

A consistent monthly payment

Fixed-rate loans are a great mortgage option if you want a monthly payment that won’t change. A fixed interest rate means your rate stays the same for the selected term of the loan – so your payment will only change once your fixed-rate period ends, at which point you may decide to re-fix, stay on a variable rate, or refinance to another lender. 

Many of our clients opt for 1-3-year fixed-rate loans, especially given it is trending under the variable rate by approximately 0.50%. Historically, fixed rates were higher than variable rates.

Variable rates

Variable-rate mortgages offer more flexibility than fixed-rate loan types. Most lenders will only allow you to link your ‘Offset’ transaction account to a Variable rate loan.

Variable-rate mortgages are a great option if you expect to sell your house or refinance before the initial fixed-rate period ends, as a break-cost penalty may apply if it is still fixed. It is also popular with our clients looking to pay down their home loan in the shortest possible time frame, as unlimited additional repayments exist.

Packaged vs Basic loans

Many major banks offer full-featured loan products as a ‘packaged’ loan option. This means the bank will waive most upfront fees (valuation, application, and establishment fees). They will also give you a discount on their fixed and standard variable rate loan, offer you an offset transaction account, and some other freebies such as credit cards – in exchange for a fee paid annually.

The vast majority of lenders are charging between $350 – 400 p.a. for their packaged products. All these fees can be tax-deductible if the mortgage is for an investment purpose.

On the other hand, basic loans are simply low-rate variable loans with your standard transaction account. There’s usually a small upfront application fee but no ongoing/annual fees.

A rule of thumb is that a packaged loan is approx. 0.15% ‘cheaper’ than a Basic loan. Therefore, if your loan amount is $250,000 or less, you are paying around $375 extra p.a. This is still cheaper than paying the $395 annual fee, so in most cases, it’s beneficial to opt for the Basic loan. 

If your loan amount is greater than $250,000, then opting for the Package loan instead is usually better. The interest savings and added benefit of having an offset account will outweigh the cost of the annual package fee.

Common Mortgage Rate Questions

If you’re just starting out on your home buying journey, check out our expat home loans guide.

Otherwise, read answers to some of our most frequently asked mortgage rate questions:

Yes, interest-only home loans are available in Australia. They allow you to pay only the interest on your mortgage for a set period of time. However, keep in mind that interest-only home loans may have higher interest rates and fees than traditional home loans. It’s important to speak with a Home Loan Expert to determine if an interest-only home loan is right for you.

A mortgage fixed rate lock keeps your interest rate from rising, between the time you’re offered a rate by a lender and the time you close on the loan. Fees will generally apply, so if you feel rates won’t be increasing any time soon, it’s usually better to not opt for a mortgage rate lock.

There are a range of mortgage options available for expats and foreign nationals in Australia, including fixed rate, variable rate, interest-only and principal and interest loans. Each option has its own benefits and drawbacks, so it’s important to consider your individual circumstances and speak with a Home Loan Expert to determine which option is right for you.

Your credit score is an important factor when applying for a mortgage in Australia, as it demonstrates your ability to make timely payments on credit accounts. While a clean credit report is generally preferred by lenders, Australian expats and foreign nationals may have a shorter credit history in Australia. It’s important to speak with a Home Loan Expert to determine your creditworthiness and eligibility for a mortgage.

The difference between an interest rate and a comparison rate is that the comparison rate is the more comprehensive view of what you’ll be paying your lender. An interest rate is a percentage you pay in order to borrow money from a lender for a specific period of time. The comparison rate includes that interest rate plus all the other additional fees. This handy article explains the differences between the comparison rate and interest rate and how to calculate each.

There are many variables involved in calculating a mortgage rate. The main factors include your citizenship, property price, deposit and loan type. Learn how to calculate your mortgage borrowing capacity, and try out our mortgage calculator to see how changing variables can change your estimate.

Other Australian mortgage options & loan products available

  • Basic: These offer low variable interest rates for loans but sacrifice loan features such as offset accounts. Different banks call this product by different names.
    • For ANZ bank, it’s called ‘Simplicity Plus’
    • For CBA bank, it’s called ‘Extra’
    • For NAB bank, it’s called ‘Base Variable’
    • For Westpac bank, it’s called ‘Flexi First Option’ – Note that their basic variable has a very sharp rate but only for the first two years, and it then reverts to a higher variable rate thereafter.
  • LMI Low-Deposit: A home loan for those with less than 20% deposit. Can obtain a loan up to 90% with the payment of Lender’s Mortgage Insurance (LMI)

  • Guarantor loans: For those with an insufficient deposit for an 80% loan but have a parent who can help them with additional collateral in the form of an unencumbered property.

Beware of home loan introductory offers

When it comes to finding the best home loan deal, many lenders offer attractive introductory offers to lure in potential borrowers. These offers can include reduced interest rates, waived fees, or even cashback incentives.

While these deals may seem like a great way to save money, it’s important to be cautious and fully understand the terms and conditions of the offer before signing up.

One common type of introductory offer is a discounted interest rate for a fixed period, such as six months or a year. While this may sound like a great deal, it’s essential to consider what will happen once the introductory period is over. In many cases, the interest rate will increase significantly, and the borrower may end up paying more in the long run than they would with a loan with a higher but stable interest rate.

Another type of introductory offer is waiving certain fees, such as application or ongoing account fees. Again, while this may seem like a great deal, it’s important to consider the loan’s long-term costs. If the interest rate is significantly higher than other loans on the market, the borrower may end up paying more in interest over the life of the loan than they would have saved by having the fees waived.

It’s also important to know any conditions attached to introductory offers. For example, some lenders may require borrowers to maintain a minimum balance in their account or make a certain number of repayments on time to continue receiving the discounted rate or fee waiver. If the borrower can meet these conditions, they may retain the benefit of the introductory offer.

Overall, it’s important to research and compare a range of home loan options before committing to any introductory offers. Make sure you fully understand the terms and conditions of the offer, including any ongoing fees or conditions, and consider the loan’s long-term costs.

By doing your due diligence, you can find the right home loan for your needs without falling prey to the allure of introductory offers that may not be as beneficial as they seem.

How to find the lowest interest rates

Finding a home loan that meets your needs is crucial rather than just choosing the cheapest option. Comparing a loan’s interest rate and comparison rate is vital, but comparing the available features is also essential.

There are several considerations to make to find the right home loan. Here are some tips on how to find the lowest interest rates for your home loan:

Do your research

Take the time to research different lenders and compare their interest rates. Use online comparison sites or seek advice from a mortgage broker.

Look for special offers

Look for special offers, promotions or discounts that lenders may offer. These can include cashback offers, fee waivers or discounted interest rates.

Check your credit score

Make sure your credit report is accurate and up-to-date, as it highly impacts the interest rate you are offered.

Choose a competitive loan type

Different loan types have different interest rates, so consider which loan type best suits your needs. For example, fixed-rate loans typically have higher interest rates than variable-rate loans, but they provide certainty and stability.

Negotiate with your lender

Feel free to negotiate with your lender for a better interest rate. You can negotiate a better rate if you have a good credit score and a solid financial position.

Consider package deals

Some lenders offer package deals that include a home loan, transaction account, credit card and other products. These deals can provide discounts on interest rates and fees.

Be aware of hidden fees

Ensure you understand all the charges associated with your loan, including application, ongoing, and early repayment fees. Hidden fees can increase the overall cost of your loan, even if the interest rate appears low.

By following these tips, you can increase your chances of finding the lowest interest rate for your home loan.

However, remember that interest rates are just one aspect to consider when choosing a home loan. Consider the loan features, fees, and other terms and conditions.

Secure your home loan at the cheapest rate with Odin Mortgage

To get a more affordable home loan, you need a low-interest rate, which means lower monthly repayments. However, finding the cheapest home loan involves more than selecting the lowest interest rate.

If you’re looking to secure your home loan at the cheapest rate, Odin Mortgage can help you find the right home loan. We are a team of experts in approving home loans for expats looking to buy property in Australia. 

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