To compare home loan rates properly, start with two numbers for each loan: the interest rate and the comparison rate. The comparison rate rolls most fees into one figure, so it is a fairer starting point than the headline rate. It still leaves things out, so you then add the costs and features it misses, such as break costs and the value of an offset account.
Next, decide whether a fixed, variable or split rate suits how you live, and test each option’s repayments at a higher rate. The loan worth choosing is the one with the lowest total cost over the period you expect to keep it, not just the lowest number on a rate card.
Why do home loan rates matter more right now?
The RBA lifted the cash rate target to 4.60% on 30 September 2026 (RBA). Lenders set their own rates, but when the cash rate moves, variable rates often follow. That makes it a good time to check whether your rate and loan structure still suit you.
This guide does not list current lender rates, because they change frequently and depend on your loan size, deposit and profile. It explains how to compare whatever rates you are offered.
What is the difference between an interest rate and a comparison rate?
The interest rate is the rate charged on your loan balance. It drives your repayments.
The comparison rate combines the interest rate with most upfront and ongoing fees into a single percentage. Lenders must show it alongside advertised rates so you can compare loans more fairly. Moneysmart explains it in its guide to choosing a home loan (checked October 2026).
What does the comparison rate leave out?
The comparison rate is calculated on a standard loan amount and term set by law, so it may not reflect your actual loan. It also does not capture:
- Break costs if you exit a fixed rate early.
- Government charges such as registration fees.
- Fees that depend on events, like late payment or redraw fees.
- The interest you save through an offset account.
- Discounts that apply only above a certain loan size.
Use it as a filter, not the final answer.
How do fees change the true cost of a home loan?
Fees can wipe out a small rate advantage. Here is what to check for each loan you compare.
| Cost | When it applies | How to compare it |
|---|---|---|
| Application or establishment fee | At the start | Add to your first-year cost |
| Valuation and settlement fees | At the start | Ask whether the lender waives them |
| Annual package fee | Every year | Multiply by your expected hold period |
| Monthly account fee | Every month | Convert to an annual figure |
| Discharge fee | When you leave | Include if you might refinance later |
| Break costs | Leaving a fixed rate early | Ask how they are calculated before fixing |
Should you compare fixed or variable home loan rates?
Both, because they do different jobs. Moneysmart’s fixed vs variable guide sets out the trade-offs (checked October 2026).
What are the pros and cons of a variable rate?
A variable rate moves with the lender’s pricing, so repayments can go up or down. Variable loans usually allow unlimited extra repayments, redraw and an offset account, and are easier to refinance without break costs.
What are the pros and cons of a fixed rate?
A fixed rate locks your repayment for a set period, which helps with budgeting. The trade-off is less flexibility: extra repayments may be capped, offset may not be available, and you may pay break costs if you sell or refinance during the fixed term.
When might a split loan make sense?
A split loan puts part of the balance on a fixed rate and part on variable. It suits borrowers who want some certainty but still want to make extra repayments or use an offset account on the variable part.
How do you build a home loan rate comparison?
For each loan on your shortlist, record:
- The interest rate and comparison rate.
- Upfront fees and ongoing annual costs.
- Features you will actually use: offset, redraw, extra repayments, splits.
- Repayments at the offered rate and at a higher stress-test rate.
- Total cost over your expected hold period, such as 3 or 5 years.
The loan comparison calculator can put two or three options side by side. For a fuller framework that includes switching and lender policy, read how to compare and switch home loans.
Why can the lowest rate still be the wrong loan?
A low headline rate can still underperform when:
- Annual fees cancel out the rate advantage.
- The loan has no offset or redraw, and you would have used one.
- Break costs trap you in a fixed rate when your plans change.
- The lender’s policy does not suit your income, so the application stalls.
An offset account, for example, reduces the balance you pay interest on (Moneysmart, checked October 2026). If you keep meaningful savings, an offset loan at a slightly higher rate can cost less overall.
How do you stress-test a home loan rate?
Run each option at the offered rate, then again at a rate a few percentage points higher. APRA expects lenders to assess new loans at least 3 percentage points above the loan rate (APRA APG 223, checked October 2026), so this mirrors how lenders think about affordability.
Use the mortgage repayments calculator or Moneysmart’s mortgage calculator to do this. If the higher repayment would leave you stretched, the loan is not as competitive as it looks.
Can you get a better rate from your current lender?
Often it is worth asking. Lenders can sometimes reprice an existing loan, which avoids switching costs. Get the revised offer in writing and compare it against your shortlist using the same total-cost method. If repayments are your main concern, the home loan repayments guide covers repricing, refinancing and restructuring.
What should you do next?
Narrow your shortlist with this framework, then talk to NewGen about home loan options that fit your income and plans. Rates, lending criteria, fees and charges vary by lender, and all loans are subject to lender approval.