5 Best Home Loans In Australia 2023

Hey, So you have decided to make the move towards home ownership,? Congratulations! Buying a new home is a big milestone, and securing the right home loan is vital.

There are some great options on the market with competitive interest rates to choose from.

This article guides you towards the best deals from the different banks as you plan to own a new home in Australia.

How we chose the top 5 home loans in Australia for 2023

To determine the top home loans for Australia in 2023, we assessed over 200 options from more than 20 lenders nationwide. We compared interest rates, fees, loan features, and customer relations to find the best.

First, we checked the interest rates and made sure they were competitive. The lower the rate, the less interest you will pay over the life of your loan. We also considered if the rates were fixed or variable and how volatile the variable part may be.

Next, we checked different fees such as; application, valuation and discharge fees in order to find loans with lower upfront and ongoing costs. We are aware of how annoying hidden fees may be.

We also evaluated useful features like offset accounts, redraw facilities, and the ability to make extra repayments. The more flexibility, the better.

Finally, we looked at the third-party customer reviews and ratings to determine overall satisfaction. Happy customers generally imply that the lender is doing great.

Best overall home loan: commonwealth bank basic home loans

The Commonwealth Bank in Australia offers a variety of home loans with different features and interest rates. Here are some details about their home loan options:

Standard Variable Rate Home Loan:

Interest Rate: 6.24% p.a.
Comparison Rate: 6.62% p.a.
Repayments: $3,076 for borrowing $500,000 over 30 years, paying principal and interest.
Features: Wealth Package savings include an interest rate discount, link multiple offsets, unlimited additional repayments, unlimited redraws, access features like top-ups, the option to split loans, and eligibility for interest rate reductions.
Fees: $395 annual Wealth Package fee; additional fees may apply.

Extra Home Loan:

Interest Rate: 6.34% p.a.
Comparison Rate: 6.35% p.a.
Repayments: $3,108 for borrowing $500,000 over 30 years, paying principal and interest.
Features: A simple variable rate with low fees without needing a Wealth Package, unlimited additional repayments, unlimited redraws, access features like top-ups, the option to split loans, eligible for interest rate reductions.
Fees: $0 establishment fee, $0 monthly loan service fee, additional fees may apply.

Fixed Rate Home Loan:

Interest Rate: 6.29% p.a.
Comparison Rate: 7.75% p.a.
Repayments: $3,092 for borrowing $500,000 over 30 years, paying principal and interest.
Features: Wealth Package savings including an interest rate discount, which is protected from interest rate spikes during the fixed term, with an option to lock in the fixed rate with the rate lock feature fee of $750; additional repayments up to $10k in a fixed year without incurring additional charges; the option to split the loan.
Fees: $395 annual Wealth Package fee, $750 fee applies if you choose the rate lock feature, Early Repayment Adjustment and Administrative Fee may apply if additional repayments are over $10k in a fixed year, switching or breaking your loan during a fixed term.

Best low interest: ANC variable rate home loan

The ANZ Standard Variable Home Loan is a flexible home loan option offered by the Australia and New Zealand Banking Group (ANZ). Here’s how it works:

Interest Rate: This loan’s interest rate can fluctuate, altering with market conditions over time.
Loan Amount: The smallest ANZ Home Loan you can get for a new Standard Variable or Fixed Rate loan is $20,000.
Repayments: Regular payments help reduce both the borrowed principal and the interest. Making an additional payment will speed up your loan pay-off.
Offset Accounts and Redraw Facilities: This loan allows you to link multiple offset accounts. An offset account is a bank account linked to your home loan. The balance of this account is ‘offset’ against your loan when interest is calculated, which can reduce the interest you need to pay. You can also redraw extra repayments you’ve made if you need to.
Fees: There are no ANZ setup or ongoing fees on your home loan.

Best for low deposit in Australia: NAB low deposit home loan

The National Australia Bank (NAB) offers a Low Deposit Home Loan under the Australian Government’s Home Guarantee Scheme (HGS). Here’s how it works:

First Home Guarantee: The government releases 35,000 slots annually aimed at supporting eligible first home buyers or buyers who have not owned a property in the past 10 years. These buyers can purchase a new or existing home with a deposit as low as 5%.
Family Home Guarantee: 5,000 guarantees are issued annually until 30 June 2025 to support eligible single parents or legal guardians with at least one dependent child. These individuals can buy their first home or re-enter the housing market with a deposit of as little as 2%.
Regional First Home Buyer Guarantee: 10,000 guarantees are issued annually until 30 June 2025 to support eligible applicants living in regional areas. These individuals can buy their first home in a regional area with a deposit as low as 5%.

Best for investors in Australia: Westpac Investment Property loan

Westpac Investment Property Loan is considered a good choice for investors in Australia. Here are some key points from the reviews:

Westpac offers a wide array of property investment loans.
They have competitive interest rates for all products, such as basic variable, package variable, and fixed rate, with pricing discounts available for package products.
They accept share and dividend income for serviceability.
They accept inner city (high-density) properties as security for loans with up to 90% Loan-To-Value Ratio (LVR).
They waive LMI available on 90% LVR investment loans for medical, accounting, and legal professionals.
They offer different types of home loan products suitable for different types of investors.
However, they have a lengthy approval turnaround time, and some customers have reported issues with customer service.

Best new home in Australia: unloan valuable

Unloan is a digital home loan product of the Commonwealth Bank of Australia (CBA) that has received very mixed reviews. Here are some key points from the reviews:

Unloan offers a simple loan, not for “complex situations”, with repayments only being offered as principal and interest.
The loan is currently available to refinancers only who have paid off at least 20% of their home loan, and with a property value cap of $3 million.
The digital-only home loans offer a redraw facility, but do not include an offset account through mortgage brokers.
Approved customers are set to experience a ‘loyalty discount’ of 0.01% every year for up to 30 years.
Some customers have praised the simple and efficient online process and the prompt customer support.
On the other hand, other customers have reported that Unloan keeps increasing interest rates even when the Reserve Bank of Australia (RBA) maintains the rates constant.