Low home loan interest rates October 2021

author-avatar By on October 01, 2021
Low home loan interest rates October 2021

Looking to dip into the property market soon, or to refinance? Savings.com.au has collated some of the lowest home loan rates on the market right now.

Variable & Fixed home loans (principal & interest)

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 27, 2021. View disclaimer.

We’ll be comparing the snapshot of some of lowest home loan rates in Australia for:

Whether you’re looking to buy your first home, buy another one for your family, or refinance your current home loan to a better value one, Savings.com.au has compiled some low interest home loans available on the market this month for owner-occupiers (not investors). 

Are you an investor? We’ve got you covered. Check out some of this month’s lowest-rate investment home loans here.

Fixed home loans (principal & interest)

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

FixedMore details
FREE REDRAW FACILITY

Fixed Rate OO P&I - 2 Years

FREE REDRAW FACILITY
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details

Owner Occupier Fixed 2 year (LVR < 60%) (Principal and Interest)

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.

Variable home loans (interest-only)

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Interest Only (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Interest Only (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details

Smart Home Loan (Interest Only) (LVR < 80%)

VariableMore details

Budget Home Loan (Interest Only) (NSW and ACT only) (LVR < 70%)

VariableMore details

Ultimate Variable Home Loan (Interest Only) (New Customer)

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.

Fixed home loans (interest-only)

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

FixedMore details

Great Rate Fixed Home Loan (Interest Only) 3 Years

FixedMore details

Premium Plus Package Fixed Rate Home Loan Special (Interest Only) 1 Year

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.

Variable P&I home loan with offset

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
VariableMore details
100% FULL OFFSET ACCOUNT

Offset Package Home Loan (Principal and Interest) (LVR < 60%)

100% FULL OFFSET ACCOUNT
VariableMore details
100% FULL OFFSET ACCOUNT

Offset Variable Owner Occupier Principal & Interest (LVR ≤ 80%)

100% FULL OFFSET ACCOUNT

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Offset products include home loans with offset accounts or facilities that operate similarly like Loans.com.au’s ‘redraw offset facility’ or Pepper Money’s ‘offset sub-account’. Rates correct as of October 27, 2021. View disclaimer.

Variable construction loans

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
GET A DISCOUNTED GREEN RATE

Green Construction Home Loan (Interest Only)

  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
GET A DISCOUNTED GREEN RATE

Green Construction Home Loan (Interest Only)

  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
VariableMore details
FREE REDRAW FACILITY

Basic Home Loan (Principal and Interest) (LVR 70%-80%)

FREE REDRAW FACILITY
VariableMore details
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
VariableMore details

Construction Home Loan (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • No ongoing fees
  • Unlimited extra repayments

Construction Home Loan (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • No ongoing fees
  • Unlimited extra repayments
VariableMore details

Rocket Repay Home Loan (Interest Only)

VariableMore details

Standard Variable Home Loan (Interest Only)

VariableMore details

Standard Variable Home Loan (Interest Only)

VariableMore details
FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS

Basic Investment Loan (Principal and Interest) (LVR < 60%)

FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.

Are low interest rates important?

Let’s take one of the cheapest home loan rates in these tables and round it to 2.50%. Now let’s add an extra 1% to this home loan rate to get a home loan at 3.50%. This might seem high considering some of the rates seen here, but the reality is a lot of people are stuck on mortgages with rates even higher than this, and many don’t even realise it. And this extra 1% can make a huge difference. 

Let’s compare two 30-year home loans, at 2.50% p.a. and 3.50% p.a. Neither home loan has an introductory rate or upfront or ongoing fees. The table below shows the difference in monthly repayments for various loan amounts.

Loan amount 2.50% 3.50% Monthly savings at 2.50% Total savings at 3.50%
$300,000 $1,185.36 $1,347.13 $161.77 $58,238.52
$400,000 $1,580.48 $1,796.18 $215.7 $77,649.22
$500,000 $1,975.60 $2,245.22 $269.62 $97,062.85
$700,000 $2,765.85 $3,143.31 $377.46 $135,889.13

Calculations made via Savings.com.au's Home Loan Comparison Calculator.

The more you borrow the more you pay in interest, and even a small difference in interest rates can add extra tens of thousands if not hundreds of thousands to the overall cost of your home loan.

What’s happening with interest rates?

At the time of writing (June 2021), the official Reserve Bank cash rate is set at 0.10% (its lowest ever level ever), and has been for some months. It’s also looking unlikely to go higher or lower for some time, with the Reserve Bank indicating it has no appetite for negative interest rates, and there would be no increase to the rate until inflation is between 2-3% and progress towards full employment has been reached.

This, of course, means home loan rates are at record lows, with many if them now sub-2% p.a, but it also means savings account and term deposit rates are extremely low too. Good news for most borrowers, not so much for savers.

How long will low interest rates remain?

Don’t expect Australia’s cash rate to reach those lofty heights of 5% or higher anytime soon.

While there’s never a guarantee that interest rates will stay low forever, the evidence seems to suggest that unless there are major changes, low interest rates are set to stay for the next few years. The Reserve Bank Governor Philip Lowe said as much in 2020 during the coronavirus pandemic, saying that deflationary pressures and large shortfalls in potential economic activity meant interest rates would stay low for “an extended period of time”.

"I think it's likely we're going to see interest rates at their current level for years," he said.

"We do face a world where there'll be a shadow from the virus for quite a few years. People will be more risk-averse, they won't want to borrow, in Australia we're going to have lower population dynamics."

Deloitte Access Economics meanwhile sang a similar tune.

“Globally and locally, interest rates will be nailed to the floor for years,” partner Chris Richardson said.

“That’s because this is a big recession, inflation is as dead as a doornail, governments will bow out of their support, leaving it up to central banks to repair economies, economies are more accident-prone than ever before, so central banks will be super cautious and, finally, because interest rates are more powerful than ever.”

How to find a good home loan interest rate

If you are willing to switch or are just entering the market, then articles such as this one would be a good place to start. And if this isn’t doing it for you, a quick five-minute Google search unveils an entire world of information at your fingertips.

If you don’t have the time or don’t trust yourself to find a good home loan, then a mortgage broker can do that for you. Bear in mind they might not necessarily get you the lowest rate on the market, but can guide you through the home buying process more quickly and more efficiently. 

If you do decide to go it alone, here are a few things to look for in a home loan interest rate: 

  • Does it have an introductory rate? Many ‘low rate’ loans actually have introductory rates with higher revert rates 
  • If it’s a fixed rate, what’s the break cost? Refinancing from a fixed rate home loan can be expensive, so check the fees on the loan before committing 
  • What are the fees in general? A low advertised rate can have a high comparison rate, due to high ongoing and upfront fees
  • Can you make extra or more frequent repayments? Making home loan repayments more frequently can shave thousands of dollars off your overall loan cost
  • Is it interest-only? Interest-only loans can be much cheaper to start with, but once the interest-only period ends repayments can skyrocket.

What to do if your bank is not reducing interest rates?

If your lender hasn’t passed on one or more of the recent cash rate cuts to your home loan, you could try negotiating with them or consider refinancing to a different lender. There are many, many lenders on the market these days, and with rates at such historic lows, there’s plenty of competition among lenders for your business.

Refinancing your home loan to a lower interest rate could save you hundreds of dollars a year and tens of thousands over the life of your loan.

Savings.com.au’s two cents 

Why pay an extra $100,000+ because you can’t be bothered to switch to or find a cheaper home loan? 

Don’t become a mortgage prisoner by sticking to a high-rate home loan – refinance to a better one (after carefully considering your options, mind). And if you’re looking for a new home loan altogether, then rates such as these could be a good place to start. 

You can also keep up with the latest home loan rate movements by checking our home loan news page.


Photo by Tom Rumble on Unsplash. Originally published by William Jolly. Updated by Alex Brewster 7/1/2021.

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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