How to bring down your home loan costs even as property prices go up
Finding a top home loan has never been more important, as the 'asking prices' for houses in major cities such as Sydney appear to be rising.
The asking price for a three bedroom house in Sydney for the week ending January 30 was up 21%, according to recent data from SQM Research.
This puts the asking price at about $1.7m.
This represents a significant jump, especially given that units only moved up 1.4% to an asking price of $791,121 in the same week.
SQM crunches the data on this weekly basis to try and offer a more timely read of the selling market. This can be useful for those considering buying a specific size of home.
For example, two bedroom units are rather popular in major cities such as Melbourne and Sydney. The asking price on two bedroom units in Sydney at the end of January was about $860,259, as per SQM’s data.
This can be broken down further by various city regions, such as the eastern suburbs of Sydney where the asking price on a two bedroom unit was an incredible $1.2m at the end of January. Meanwhile, a two bedroom unit in Parramatta was going for just $601,000 over the same week.
A simple comparison like this only highlights the importance of looking at a few different suburbs within a given city because the laws of supply and demand can be applied to any given area – and are changeable over time.
Prices one thing, home loan rates another
This type of property review also shows a prospective buyer that the size of your home loan - and indeed your first deposit - can vary greatly when considering different housing types.
For example, if your goal is to simply get onto the property ladder, then a smaller apartment in a suburb with a good supply of units is surely going to help you bring down the cost of your home loan.
If, for instance, you were to buy a unit in the Liverpool area of Sydney, you’d be looking at around $625,000 asking price, as per SQM. Let’s say you make a (20%) first deposit of $12,500 on that property – you would then require a home loan of about $612,500.
The average variable home loan rate is currently 6.85% p.a. in the Mozo database, so monthly repayments on this amount over 25 years would be $4,271.
However, you could bring your costs down quite a bit just by shopping around for a better home loan rate. Say you were able to secure 6% p.a., you could reduce your monthly repayments to $3,846.
Clearly it’s well worth the effort doing some basic home loan comparisons!
Compare the top home loans - last updated 17 May 2024
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First Home Buyer Loan Special
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.90% p.a. variable5.93% p.a.A low variable rate loan for home buyers. No establishment or ongoing fees to pay. 100% offset account included. Allows for unlimited repayments, redraws and flexible repayment options.
CompareCompareFirst Home Buyer Loan Special
A low variable rate loan for home buyers. No establishment or ongoing fees to pay. 100% offset account included. Allows for unlimited repayments, redraws and flexible repayment options.
- interest rate
- 5.90% p.a. variable
- comparison rate
- 5.93% p.a.
- interest rate
- 5.90% p.a. variable
- comparison rate
- 5.93% p.a.
- upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - fees apply
- Offset account
- yes
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- -
- maximum borrowing amount
- $5,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- Special Offer Variable Rate available for a limited time.
Read our Mozo Review to learn more about the G&C Mutual Bank First Home Buyer Loan Special
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Basic Home Loan Special Offer
Owner Occupier, Principal & Interest, LVR 80-95%
interest rate
comparison rate
Initial monthly repayment6.69% p.a. variable6.70% p.a.CompareCompareBasic Home Loan Special Offer
- interest rate
- 6.69% p.a. variable
- comparison rate
- 6.70% p.a.
- interest rate
- 6.69% p.a. variable
- comparison rate
- 6.70% p.a.
- upfront fees
- $100
- Ongoing fees
- $0.00
- Discharge Fee
- $350.00
- Extra repayments
- Yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- Receive $2,000 refinance cashback, min loan size of $250,000 and LVR less than or equal to 80% (excludes refinances from Westpac Group), apply by 30 June 2024 and settle by 31 October 2024.
Read our Mozo Review to learn more about the St.George Basic Home Loan Special Offer
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FHBG Special Offer Classic Home Loan
interest rate
comparison rate
Initial monthly repayment6.19% p.a. variable6.21% p.a.CompareCompareFHBG Special Offer Classic Home Loan
- interest rate
- 6.19% p.a. variable
- comparison rate
- 6.21% p.a.
- interest rate
- 6.19% p.a. variable
- comparison rate
- 6.21% p.a.
- upfront fees
- $195
- Ongoing fees
- $0.00
- Discharge Fee
- $530.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $800,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the QBANK FHBG Special Offer Classic Home Loan
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Basic Variable Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.94% p.a. variable5.99% p.a.CompareCompareBasic Variable Home Loan
- interest rate
- 5.94% p.a. variable
- comparison rate
- 5.99% p.a.
- interest rate
- 5.94% p.a. variable
- comparison rate
- 5.99% p.a.
- upfront fees
- $600
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $1,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly, Fortnightly, Weekly
- Special Offers
- -
Read our Mozo Review to learn more about the Community First Bank Basic Variable Home Loan
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First Home Buyer Variable Home Loan
Advantage Plus, Owner Occupier, Interest Only, LVR >90%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable6.76% p.a.CompareCompareFirst Home Buyer Variable Home Loan
- interest rate
- 5.99% p.a. variable
- comparison rate
- 6.76% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 6.76% p.a.
- upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $299.00
- Extra repayments
- yes - free up to $10,000 p.a.
- Redraw facility
- no
- Offset account
- yes
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Interest Only
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unity Bank First Home Buyer Variable Home Loan
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