Best Home Loan Rates in Australia (2026)

The lowest variable home loan rate in Australia right now is 5.43% p.a., with several challenger banks and non-bank lenders competing aggressively on price. Fixed rates remain competitive across 1 to 5-year terms. This guide compares the best rates across every loan type to help you find the cheapest mortgage - whether you're buying your first home, upgrading, or refinancing.

How We Compare Home Loan Rates

All rates in this guide are sourced from bank product disclosure statements and the Consumer Data Right (CDR) API. We show both the advertised rate and the comparison rate, which is the true measure of cost because it includes fees.

Important: rates shown are for owner-occupiers with principal and interest repayments unless otherwise noted. Investment loans and interest-only loans typically carry higher rates.

Best Variable Rate Home Loans

Variable rates move with the market. When the RBA changes the cash rate, your bank will usually adjust your variable rate accordingly (though not always by the same amount).

Advantages: Flexibility to make extra repayments, redraw funds, and switch or refinance without break costs.

Disadvantages: Your repayments can go up if rates rise.

Best Fixed Rate Home Loans

Fixed rates lock in your repayment amount for a set period (typically 1 to 5 years). After the fixed period ends, you'll revert to the lender's variable rate.

1-Year Fixed

2-Year Fixed

3-Year Fixed

Big 4 vs Challenger Banks

The Big Four banks (CommBank, ANZ, NAB, Westpac) are rarely the cheapest. Their standard variable rates typically sit 0.30% to 0.70% above the best challengers. However, they do offer:

• Extensive branch networks
• Bundled products (offset accounts, credit cards)
• Larger loan size capabilities
• Established digital platforms

Challenger banks and non-bank lenders compete primarily on rate. Names like Macquarie, ING, Ubank, and Athena consistently appear at or near the top of rate tables. The trade-off is often fewer features or less flexible lending criteria.

Split Rate: The Best of Both

A split loan divides your mortgage into two portions - one fixed, one variable. This gives you:

• Certainty on the fixed portion (predictable repayments)
• Flexibility on the variable portion (extra repayments, offset account)
• Partial protection against rate movements in either direction

A common split is 50/50 or 60/40 (variable/fixed). There's no single "best" ratio. It depends on your risk appetite and cash flow.

What About Offset Accounts?

An offset account is a transaction account linked to your home loan. The balance in the offset reduces the principal on which interest is calculated. For example, a $500,000 loan with $50,000 in offset means you only pay interest on $450,000.

Not all loans come with offset accounts, and some charge a monthly fee for the feature. Whether an offset is worth it depends on how much cash you'll realistically keep in the account. If you maintain a large balance, the savings can be substantial. If the account sits near zero, you're paying for a feature you're not using.

Refinancing: When Does It Make Sense?

Refinancing to a lower rate is one of the most impactful financial moves you can make. On a $500,000 loan, a 0.50% rate reduction saves roughly $160 per month or $1,920 per year.

Refinancing makes sense when:

• Your current rate is more than 0.25% above what you could get elsewhere
• You've built equity above 80% LVR (avoiding LMI on the new loan)
• Your fixed rate period is ending (no break costs)
• You want features your current loan doesn't offer (offset, redraw)

See our How to Refinance Your Home Loan guide for a step-by-step walkthrough.

Our Take: Finding the Right Home Loan

The lowest home loan rates in 2026 are consistently found at challenger banks and non-bank lenders, not the Big Four. Use the comparison rate (not just the headline rate) to compare true costs, and consider your LVR, loan features, and flexibility needs alongside the rate itself.

If you're on a variable rate that hasn't moved in a while, there's a good chance you're paying more than you need to. Compare your current rate against the tables above, and if the gap is more than 0.25%, it's worth investigating a switch.

First Home Buyers

If you are buying your first home, you may be eligible for government grants and stamp duty concessions that significantly reduce your upfront costs. Many of the lenders in the tables above also participate in the federal Home Guarantee Scheme, which lets you buy with as little as 5% deposit and no Lender's Mortgage Insurance. See our First Home Buyer Grants guide for a full state-by-state breakdown.