Switch or refinance your mortgage

What are the best home loan rates in Australia?

The best home loan rates in Australia right now start from around 4.85% p.a. Currently, the best rates are generally available on shorter-term fixed loans, with variable rates starting from around 5.00% p.a.

The average mortgage rate in Australia is 5.51% p.a., meaning many borrowers could benefit from reviewing their current rate and refinancing their loan.

Generally the best home loan rates are available on owner occupier loans for borrowers with a large deposit, or a high level of equity for existing borrowers.

What interest rate will I qualify for?

The home loan interest rates you can access will depend on which lender you choose, whether you’re buying a home to live in or an investment property, how much of a deposit you have, what type of loan you want and your wider financial situation.

Here's a quick summary of each of these points:

Your choice of lender: Some lenders offer particularly competitive home loan rates, particularly non-bank lenders and some member-owned banks. The major banks in Australia typically do not offer the lowest rates.

Owner-occupier vs investor: Borrowers who are buying a home to live generally qualify for lower rates than investors.

Your deposit: Borrowers with a large deposit (30%+) generally qualify for the lowest home loan rates. That’s because the higher your deposit, the lower the risk for the lender.

Loan type: Rates vary between fixed and variable loans, as well as between principal and interest and interest-only loans.

Your wider financial situation: If you have bad credit or a more complex financial situation (e.g. you’re self-employed), you may only have access to specialist lenders who typically charge higher rates of interest due to the increased risk involved.

How does my home loan deposit affect my interest rate?

If you have a small deposit (e.g. below 20%) you typically won’t have access to the lowest home loan rates. That’s because a lot of lenders charge different rates depending on the borrower’s ‘LVR’ or loan-to-value ratio.

So for example if you have a 5% deposit, your loan-to-value ratio is 95% (loan amount as a percentage of the value of the property) and you may be charged a higher rate versus an existing borrower whose loan is only 60% of the value of their property.

How can I get a better home loan rate?

The best way to get a better home loan rate is to get an expert mortgage review, which assesses your current rate versus the rates available from a wide range of other lenders.

You may be able to secure a better rate on exactly the same kind of loan, or you could consider locking in a fixed rate if there are lower rates available.

As your home loan rate is influenced by your LVR, lowering this can be a smart way to secure a lower rate. A mortgage broker can help you assess lenders based on which one will offer the best LVR terms (e.g. by valuing your property at a higher level).

If you don’t want to switch lenders, it’s still worth asking your current lender if they can offer you a lower rate. If you have been a reliable customer (making all repayments on time), your lender may be able to sharpen your rate in order to keep you as a customer.

Are home loan rates going up or down in 2026?

Home loan rates look to be increasing overall as lenders anticipate that the Reserve Bank of Australia may increase the official cash rate in 2026. Right now, lenders are mainly increasing their fixed-rate loans, but if there’s an increase in the cash rate, variable rates will increase too.

Making home loan interest rate predictions is notoriously difficult, so it’s rarely a good idea to try to anticipate where interest rates are going. A smarter approach is to ensure you’re on a competitive rate on a loan that more broadly makes sense for your situation. Speaking with a mortgage broker is a good way of ensuring that’s the case for you.

Is it better to choose a fixed or variable rate?

Depending on your situation, a fixed or variable rate might make more sense for you at various times.

For example, if you’re worried about rates increasing and you don’t have much flexibility in your budget, locking in a fixed rate can be a sensible way to go.

But if you value flexibility, such as the ability to make extra repayments or change your loan in the near future, a variable rate may be a better way to go.

You could also split your loan between fixed and variable (e.g. 50% fixed and 50% variable) if you’re not sure which is best.

How can borrowers prepare for potential rate increases?

If you’re worried about future rate increases, you could consider fixing your home loan at today’s rates, meaning your rate won’t increase even if there is a cash rate increase from the Reserve Bank.

You could also consider increasing your repayment amount gradually now so you’re less likely to have unexpected surprises in future.

Another option is to check if you can get a better interest rate on your home loan now by refinancing. That way, if rates do go up, you’ll at least be starting from a lower level.

Should I refinance if rates change in the future?

A rate change is a good time to assess what you’re currently paying on your home loan and whether you can get better value with another lender.

Just remember that if you’re on a variable rate, most lenders increase their variable rates at the same time (following a cash rate increase). Still, it’s worth checking to make sure you’re not paying too much.

Can I negotiate a better interest rate with my lender?

Yes, it’s certainly worth a try! If you can see there are better rates available, let your lender know and make it clear that you will switch if they can’t offer you a better rate. Chances are they’ll be open to offering you a better deal if it means keeping your business/

What is the home loan comparison rate?

When you’re comparing home loan rates, it’s important to consider the comparison rate as well as the interest rate on a loan. The comparison rate factors in the interest rate and most of the main loan fees (e.g. application fee and ongoing account keeping fees), so it gives a better reflection of the full cost of the loan.

It’s important to bear in mind that there are still limitations to what the comparison rate tells you. For example, the comparison rate is calculated using certain assumptions that may not reflect your loan or situation.