Up Bank Home Loans & Rates Comparison

Up Bank has a deliberately narrow home loan range for owner occupiers. There are two main choices:

• Up Home Variable Rate Loan: A variable home loan with a single advertised rate, up to 50 free offset accounts, unlimited additional repayments and free redraw. There are no application, setup, monthly, annual or discharge fees charged by Up.

• Up Home Fixed Term Loan: Available with fixed terms of one to five years, including a four-year option. Borrowers can make up to $30,000 in additional repayments during the fixed term. The loan reverts to Up's current variable rate when the fixed period ends unless the borrower chooses to fix again.

Unlike many lenders, Up does not have different advertised variable rates for different LVR bands. Eligible owner occupiers can apply with a deposit from 10% and receive the same rate offered to borrowers with larger deposits.

The range is not designed for every borrower. Up Home is only available for owner-occupied properties, with principal and interest repayments, in a capital city or major regional centre. It does not currently cater for investors or interest-only borrowers.

Up's variable loan is the core of its home lending offer. The current rate is 5.95% p.a. (comparison rate* 5.95% p.a.) for eligible owner occupiers making principal and interest repayments.

The identical interest and comparison rates are a genuine strength. It reflects the absence of Up application, setup and ongoing bank fees under the standard comparison-rate assumptions, making the headline rate a relatively accurate indication of the loan's cost.

Another point of difference is that Up advertises one variable rate rather than applying different rates at different LVRs. A borrower with a 10% deposit can therefore receive the same advertised rate as someone borrowing 60% or 80% of the property's value, subject to approval and the property meeting Up's criteria.

This is particularly competitive for borrowers with deposits below 20%. Many lenders apply sizeable rate premiums as the LVR increases, even before any lenders mortgage insurance or other costs are considered.

Up Home includes one of the more flexible offset arrangements in the market. Borrowers can have up to 50 Up Savers automatically converted into free 100% offset accounts. An eligible joint Spending account can also offset the loan.

This means borrowers can continue separating money into categories such as bills, holidays, renovations and emergency savings while using the combined balances to reduce their home loan interest.

Up also integrates its existing savings tools with the home loan. Round Ups and Pay Splitting can direct money into offset Savers automatically, while money left temporarily in an eligible Spending account can reduce the daily loan balance used to calculate interest.

There is no annual package fee or higher offset-specific interest rate. That gives Up an edge over lenders that charge several hundred dollars a year or apply a higher rate for an offset loan. However, Savers being used as offsets do not also earn savings interest.

The three-, four- and five-year rates are the strongest relative to the market. The four-year rate is particularly competitive, although considerably fewer lenders offer that fixed term.

The one-year rate sits around the middle of the market, while the two-year rate is more expensive than most comparable products. Borrowers should therefore compare terms rather than assuming Up is equally competitive across its fixed range.

Up allows up to $30,000 in additional repayments during a fixed term. At the end of the term, borrowers can choose to fix again; otherwise the loan rolls onto Up's variable principal and interest rate, currently 5.95% p.a. (comparison rate* 5.95% p.a.).

The fixed comparison rates are lower than the initial fixed rates because the regulated calculation assumes the loan reverts to Up's lower variable rate after the fixed period.

Eligible borrowers can apply for Up Home with a deposit from 10%, equivalent to an LVR of up to 90%.

The main advantage is Up's single-rate approach. Its variable rate does not increase for borrowers with smaller deposits, whereas many competitors apply higher pricing above 80% LVR.

However, a 10% deposit does not necessarily mean a borrower will avoid lenders mortgage insurance or other low-deposit costs. Applicants should confirm whether LMI applies to their circumstances and factor it into the total cost of the loan.

Up's property restrictions are also important. The home must be owner occupied and located in a capital city or major regional centre. Apartments, unusual properties and locations outside Up's accepted areas may be subject to additional restrictions or may not be eligible.

Up Home is closely integrated with the Up app. Customers apply through the app, manage their loan alongside their everyday banking and can use Up's Home Zone tools to estimate borrowing power and prepare for an application.

Borrowers must become an Up customer, or “Upsider”, before applying. The process is designed to be completed digitally, although locally based Up Home Guides are available through the app and by phone during business hours.

This approach will suit people who already use Up or want their transaction accounts, savings buckets, offsets and home loan in one app. Borrowers who prefer an extensive branch network or paper-led application may find another lender more suitable.

Up is a brand of Bendigo and Adelaide Bank Limited. Bendigo and Adelaide Bank is the lender and holds the relevant Australian Financial Services Licence and Australian Credit Licence.

Up's simplicity comes at the cost of a narrower target market. Up Home currently does not offer:

• investment property loans;

• interest-only repayments;

• a separate basic variable loan without offset;

• construction loans;

• loans for properties outside its approved capital-city and major-regional locations; or

• a conventional face-to-face branch application through the Up brand.

Borrowers who need one of these options will need to consider another lender. Up's range is instead focused on owner occupiers who want to repay their home faster using offsets, additional repayments and automated savings tools.

Up Home is one of the stronger variable offset loans in our database comparison. Its combination of a competitive single rate, up to 50 free offsets and virtually no bank fees is particularly compelling for owner occupiers who already organise their money through multiple savings accounts.

It can be especially competitive for an eligible borrower with a 10–20% deposit because Up does not apply the rate premiums commonly seen at higher LVRs. Its three-, four- and five-year fixed rates also compare well for borrowers who want repayment certainty.

The main limitation is eligibility rather than price. Up does not cater for investors, interest-only borrowers, construction projects or every property location. It is best suited to digitally confident owner occupiers buying or refinancing a relatively standard property in one of Up's supported areas.