Home Loan Interest Rates in Australia: 2026 Comparison

Current Rate Environment

After the rate tightening cycle, Australian home loan rates have stabilised in 2026. Variable rates sit between 5.5% and 7%, while fixed rates offer some certainty for borrowers wanting to lock in.

Variable vs Fixed vs Split

Variable Rate

• Moves with the RBA cash rate
• Typically offers more features (offset, redraw, extra repayments)
• Best when rates are falling or stable
• Current range: 5.5% - 6.8%

Fixed Rate

• Locked for 1-5 years
• Certainty of repayment amount
• Often fewer features (limited extra repayments, no offset)
• Current range: 5.2% - 6.5% depending on term

Split Loan

• Part fixed, part variable
• Balances certainty with flexibility
• Popular choice for risk-averse borrowers
• Typically 50/50 or 60/40 split

What Affects Your Rate

1. Loan-to-value ratio (LVR) — Lower LVR (bigger deposit) gets better rates
2. Loan amount — Some lenders offer discounts for larger loans ($500k+)
3. Loan type — Owner-occupier rates are lower than investor rates
4. Repayment type — Principal and interest is cheaper than interest-only
5. Employment — PAYG employees get better rates than self-employed

Key Features to Compare

Offset Account

• Your savings offset your loan balance, reducing interest
• A $50,000 offset on a $500,000 loan saves $3,000+ per year
• Not all loans include a full offset — check the fine print

Redraw Facility

• Access extra repayments you've made
• Less flexible than offset but still useful
• Some lenders charge redraw fees

Extra Repayments

• Variable loans usually allow unlimited extra repayments
• Fixed loans often cap at $10,000-$20,000 per year
• Extra repayments dramatically reduce total interest paid

Comparison Rate Explained

The comparison rate includes fees and charges, giving a truer cost picture. Always compare using comparison rates, not just the headline rate. A loan with a low rate but high fees can cost more overall.

How to Get the Best Rate

• Shop around — Don't just go to your bank. Use a mortgage broker or comparison sites
• Negotiate — Banks have discretion, especially for strong applications
• Review annually — Refinance if your rate isn't competitive
• Consider smaller lenders — Online lenders and credit unions often beat the big four
• Improve your LVR — A higher deposit or equity position unlocks better rates

When to Refinance

Consider refinancing if:

• Your rate is 0.5%+ above current market rates
• Your fixed term is ending
• You've built equity and can drop LMI
• You want different features (offset, flexibility)
• Factor in switching costs ($500-$1,500) before deciding