Property prices in capital cities slowed their seemingly insatiable growth last month, while certain areas even saw prices fall.
This is a double-edged sword for prospective home buyers, as the slowdown is largely due to the fear of rising rates.
With that in mind, we’ve done a bit of digging to find the very best interest rate on offer for your property purchase. We’ve looked for fixed rates, as it seems fairly clear at this point that rates are only going to increase from now – so you’re most likely better off locking in a rate today.
So assuming a loan of $500,000 for an owner-occupied property on a loan term of 25 years, paying off principal and interest, here are the best one-year fixed home loans on the market today.
G&C Mutual Bank Fixed Rate Home Loan
This Sydney-based mutual bank is offering a very competitive fixed rate home loan, at just 1.98 per cent. Another major benefit of this is the 5 per cent minimum deposit required – a great help if the deposit is holding you back. It doesn’t offer offset accounts and has a limited redraw facility, but it does let you make extra repayments. If you have a low deposit and just want a simple, low-rate loan, this is a good option.
Minimum Loan Amount $0
Maximum Loan Amount N/A
Maximum Loan Term 30 years
Maximum LVR 95%
Loan Redraw Facility Yes
Offset Account No
Split Loan Facility Yes
Fixed Interest Option Yes
Extra Repayments Up to 5% of the loan balance per annum
Application Fee $500
Lender’s Legal Fee At cost
Valuation Fee At cost
Ongoing Fees $0 p.a.
Settlement Fee At cost
Discharge Fee $300
Well Home Loans Balanced Fixed
This second-tier lender has a 2.54 per cent loan on the table at the moment, with just 10 per cent minimum deposit required. We also like the option of a 100 per cent offset account (with a $10 monthly fee), which is uncommon with fixed rate loans. The fees are also quite reasonable given the low cost of the loan.
Minimum Loan Amount $200,000
Maximum Loan Amount $2,000,000
Maximum LVR 90%
Loan Redraw Facility Yes
Offset Account Yes
Split Loan Facility Yes
Fixed Interest Option Yes
Extra Repayments Yes
Application Fee $250
Lender’s Legal Fee $385
Valuation Fee Up to $300 free
Ongoing Fees $0 p.a.
Settlement Fee $0
Discharge Fee $30
86 400 Own Home Loan – Fixed
It’s no surprise that a neobank is in one of the top three spots. This competitive 2.99 per cent loan is more flexible than most fixed loans, as it has a redraw facility and the option to make up to $20,000 in extra repayments during the fixed term. However, the substantial fees – particularly the annual fee – are a downside in our eyes. The app is well regarded, which is a bonus for those that like to be able to manage money from their phone.
Minimum Loan Amount $80,000
Maximum Loan Amount $5,000,000
Maximum LVR 80%
Loan Redraw Facility Yes
Offset Account No
Split Loan Facility Yes
Fixed Interest Option No
Extra Repayments Yes
Application Fee $250
Lender’s Legal Fee $0
Valuation Fee Free if valuation is under $300
Ongoing Fees $250 p.a.
Settlement Fee $250
Discharge Fee $300
UBank UHomeLoan Fixed Rate
This newer lender (backed by NAB) is also offering a 2.99 per cent fixed loan at the moment. You’ll still need to front up a 20 per cent deposit, but this home loan allows for up to four account fixed/variable splits, which may be useful for more complex accounting situations. While you can’t make extra payments on the fixed portion, you can pay into the variable split portion. Unfortunately, there’s no redraw or offset functionality with this loan, but the fees are marvelously low.
Minimum Loan Amount $100,000
Maximum Loan Amount $1,000,000
Maximum Loan Term 30 years
Maximum LVR 80%
Loan Redraw Facility No
Offset Account No
Split Loan Facility Yes
Fixed Interest Option Yes
Extra Repayments Yes
Application Fee $0
Lender’s Legal Fee $0
Valuation Fee $0
Ongoing Fees $0 p.a.
Settlement Fee $0
Discharge Fee $0
ME Flexible Fixed Home Loan with Member Package 1 Year Fixed Rate LVR >80% & ≤90%
ME has a huge number of home loans to choose from, fixed from between one and seven years and depending on the deposit you can produce. For one year with a 10 per cent minimum deposit, you can get a very reasonable rate of 2.99 per cent. The loan offers rate discounts and waived fees in exchange for a $395 annual package fee (which is still higher than some of our other options) and extra repayments up to $30,000 per year are allowed.
Minimum Loan Amount $40,000
Maximum Loan Amount N/A
Maximum Loan Term 30 years
Maximum LVR 90%
Loan Redraw Facility Yes
Offset Account No
Split Loan Facility Yes
Fixed Interest Option No
Extra Repayments Yes
Application Fee $0
Lender’s Legal Fee $200
Valuation Fee $0
Ongoing Fees $395 p.a.
Settlement Fee $0
Discharge Fee $350
Of course, each home loan is different and your eligibility and repayments will depend on your personal situation. You may even find that a slightly higher rate makes sense for you when balanced with other features and factors. For a more detailed analysis of the costs of your home loan, you can use calculators like this one from MoneySmart or this one from loans.com.au.
A good mortgage broker can help you find the right loan for your situation and help you put your best foot forward when you apply. You can also apply directly to a lender, though this will work best if you have a high deposit, a stable income and a good credit rating.
Know of any better mortgage rates out there? Let us know in the comments. And happy house hunting!