Interest rates, repayment types, fees, and features decide what your mortgage really costs. Use this guide to compare options before you borrow.
Try our home loan calculator for a quick repayment check, or run the full calculator to include stamp duty, grants and other settlement costs.
Launch Full CalculatorWhen you shop for a home loan, the interest rate is one of the biggest cost drivers. Even a small difference — for example 0.5% — can add up to thousands of dollars over a 25 or 30 year loan.
Rate is not the only factor. Repayment type, loan term, fees, and features all change what you pay and how flexible the loan is if your circumstances change. Compare at least two lenders before you decide.
Most buyers choose this structure. Each repayment covers interest plus a portion of the amount you borrowed (the principal). Over the agreed loan term — often 25 or 30 years — you pay the loan down to zero.
For an initial period (for example five years), repayments cover interest only. Your debt does not reduce during that time. Repayments may look lower at first, then rise when you switch to principal and interest. Make sure you can afford the higher repayments later.
Weigh fixed and variable options against your need for certainty versus flexibility. A partially fixed (split) loan can give you a bit of both.
| Rate type | Pros | Cons |
|---|---|---|
| Fixed | Predictable repayments for the fixed period; fewer features can mean a lower cost. | No benefit if rates fall; break fees may apply if you switch early; extra repayments can be limited. |
| Variable | More features and flexibility; usually easier to refinance; extra repayments often allowed. | Repayments can rise or fall; more features can cost more. |
| Split | Fix part of the loan for certainty and keep part variable for flexibility (e.g. 50/50 or 20/80). | Two rate structures to manage; features and fees still need careful comparison. |
Features like an offset account, redraw facility, or line of credit can help you pay less interest or access funds later. They can also cost more. Ask whether you will actually use them.
Savings linked to your loan reduce the balance you pay interest on. Worth it if you keep a meaningful offset balance; less useful if the balance stays low.
Lets you access extra repayments you have already made. Check redraw fees and any limits before you rely on it.
Paying more than the minimum can cut years off the loan. Confirm the loan allows it without penalty — especially on fixed rates.
A basic loan with fewer features can be cheaper if you will not use offset, redraw, or package perks. Avoid paying for nice-to-haves.
With a borrowing amount in mind, compare loans from at least two lenders. Look past the headline rate to fees, comparison rate, term, and features. Comparison websites can help, but they are businesses and may promote some products — they may not show every option.
| Compare | What it means |
|---|---|
| Interest rate (per year) | The rate advertised by the lender on the loan amount. |
| Comparison rate (per year) | A single cost figure that includes the interest rate and most fees. |
| Monthly repayment | What you would pay each month at the quoted rate and term. |
| Application fee | One-off setup cost when the loan starts (also called establishment or upfront fee). |
| Ongoing fees | Monthly or annual service fees for administering the loan. |
| Loan term | How long you have to repay the loan — shorter usually means less total interest. |
| Loan features | Offset, redraw, extra repayments, or line of credit — and any fees attached. |
A practical process many buyers follow: decide your must-have features (for example the ability to make extra repayments), compare rates and fees across a couple of comparison tools, model repayments at different rates and terms, then ask two lenders for written quotes personalised to your situation before you choose.
List must-have vs nice-to-have features for your lifestyle.
Compare interest rate, comparison rate, and fees side by side.
Model repayments if rates rise by about 2%.
Get at least two personalised written quotes before you commit.
Use our quick home loan calculators for repayments, borrowing power, LMI, and extra repayments — then open the full calculator for stamp duty and settlement costs.
Launch Home Loan CalculatorsThis guide summarises general consumer principles for choosing a home loan in Australia and is informed by publicly available ASIC MoneySmart guidance. It is not personal financial advice. Loan products, rates, fees, and features change frequently. Compare current lender disclosures and consider speaking with a licensed mortgage broker or credit adviser before you borrow.