GUIDES & RESOURCES

Your Guide to Comparing Home Loans

When it comes to home loans, everyone is looking for the lowest interest rates – but there are lots of other features to consider that could also impact your hip pocket.

Compare home loans the easy way

We partnered with Lendi* to help you compare home loans from over 35 lenders and over 2,500 home loan products.

Getting a home loan with the right features is easier if you know what you’re looking for, so it’s important that you first understand how you want to structure it.

To help you find a home loan that’s suitable for you, we’ve put together a list of things to ask yourself before you start comparing.

What interest rate works for you?

Interest rates can have a significant impact on your repayments, so one way to tailor a loan to suit your needs is to compare home loan interest rates types.

These can include:

  • Fixed interest. With fixed rate home loans, your interest rate is set for an agreed period of time – typically one to five years. This can provide a degree of security if you’re working with a strict budget or you like to plan ahead.
  • Variable interest. With a variable home loan rate, the interest you pay can fluctuate with market interest rates changes and lender pricing policies. This option might suit those who have the capacity to be flexible with their repayments.
  • Split interest. Split interest means one portion of your home loan has fixed interest and one portion of your home loan has variable interest. This offers security while also taking advantage of interest rate cuts. Use this handy Split Loan Calculator to get an idea of your repayments under different fixed and variable rates.

Is flexibility important to you?

If you have the capacity to save or make extra repayments on top of your standard repayments, you may want to consider the following features:

  • Offset accounts. Attaching an offset account to your home loan means the balance of your savings is taken off the principal before the interest is calculated. Your repayments will stay the same but you’ll be charged less interest, so more of your repayment will be going towards the principal of your home loan.
  • Flexible repayments. Some home loans lock you in to set repayments, but a flexible repayment feature allows you to make additional repayments when you can. Use iSelect’s Extra Repayments Calculator to work out how much time and interest you could potentially save by making extra repayments.
  • Redraw facilities. Home loans with redraw facilities allow you to access any extra money you’ve paid off your home loan on top of your minimum repayments. In the short term, you can make extra repayments to reduce the amount of interest you pay.

Are you staying put or planning to move?

If you’re planning to move, build or renovate, the following features may ease the transition:

  • Bridging loan. With bridging finance, you can purchase a new home before the sale of your existing home.
  • Loans for building. If you’re building a home from scratch, your loan requirements will be different to a standard home loan because you won’t need to draw on all of the money at once. Loans for building are generally divided into progress payments to cover the initial stages of building right up to completion.
  • Loans for renovating. There are different ways to fund a renovation. If you have equity in your home, you can consider refinancing your existing loan. Alternatively, you might investigate a construction loan, which is similar to a building loan in that it allows you to draw funds at different stages of the renovation.
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