Home loan types and features compared
How the main Australian home loan types and features work, who they suit and what to watch for.
This table compares loan types and features, not lenders. The right mix depends on how long you expect to keep the loan, whether you want repayment certainty, and how much spare cash you hold. Use the repayment calculator to put numbers on each option and read the linked guides for worked examples.
Select a column header to sort.
| Option | How it works | Good for | Watch out for |
|---|---|---|---|
| Basic variable | Rate moves with the lender's decisions, usually after RBA changes; few features, often no annual fee | Borrowers who want a low rate and will not use an offset | May have limited or no offset; rate can rise at any time |
| Package variable | Variable rate with an annual package fee that bundles an offset account, credit card or fee waivers | Larger loans with meaningful offset balances | Annual fee can outweigh the rate discount on a smaller loan; check the comparison rate |
| Fixed rate (1 to 5 years) | Rate locked for the term, then reverts to the lender's variable rate | Tight budgets that need certainty for a set period | Break costs if you sell or refinance early; extra repayments often capped; revert rate can be high |
| Split loan | Part fixed, part variable, often with the offset on the variable part | Wanting some certainty and some flexibility | Two sets of terms; the fixed part still carries break costs |
| Interest only (owner-occupier or investor) | Repayments cover interest only for a set period, usually up to five years, then switch to principal and interest | Investors managing cash flow, short-term needs such as building or parental leave | Repayment jumps at the end of the period; more total interest; often a higher rate |
| Offset account | Savings balance is deducted from the loan balance before interest is calculated | Households holding emergency funds or saving for tax bills | Only saves at the loan rate on money you actually keep there; may need a package |
| Redraw facility | Extra repayments can be withdrawn later from the loan | Disciplined savers who want a lower rate without a package fee | Lender can limit redraw; can complicate tax on investment loans |
| Low deposit with LMI | Borrow above 80% of the property value; you pay lenders mortgage insurance, which protects the lender | Buying sooner with a 5% to 15% deposit | LMI can be thousands of dollars and is often added to the loan |
| Home Guarantee Scheme | Government guarantee lets eligible buyers borrow with a 5% deposit (2% for the Family Home Guarantee) without LMI | Eligible first home buyers and single parents | Property price caps and eligibility rules apply; check Housing Australia |
Features and fees differ by lender and change over time. Always compare the comparison rate and the key facts sheet, and confirm current rules with ASIC's Moneysmart, APRA and Housing Australia. This table is general information, not advice.