How do I score the best home loan deal?

Or How can I save money on my mortgage? or How can I get a better home loan rate?

Most Australians assume their home loan is “pretty good” — but the truth is many households are unknowingly paying tens of thousands more than they need to. A difference of just 0.15% p.a. in rates and $100 extra in annual costs on a million-dollar home loan for 30 years translates into more than $37,500 in additional cost. Truly, this is one area where "good enough" is not good enough. In fact, this should be the first place to look for savings in your household budget.

Finding the best home loan isn't just about spotting the lowest advertised interest rate. It is the loan with the lowest total cost over your expected loan term, factoring in interest, fees, features you will actually use, and any cashback offers, from a lender you are actually eligible for.

What Does a 'Great Home Loan Deal' Actually Mean?

The best deal is about finding the lowest total cost loan that meets your specific needs. That means factoring in:

• Essential features that match your financial situation
• Upfront and ongoing fees
• Available rebates and cashback offers from lenders and brokers
• Interest charges (both fixed and variable periods)

Example: A loan with a 5.85% interest rate but no annual fee might actually cost less over time than a 5.75% loan with a $395 annual package fee, especially for smaller loan amounts. Many borrowers focus solely on the rate and miss these critical details.

Some of the best savings opportunities come from upfront incentives rather than rate differences:

• Refinance cashback offers (often $2,000 to $4,000)
• Rebates from broker commissions
• Waived application fees
• Discounted LMI (Lenders Mortgage Insurance)

Example: A $2,000 cashback offer on a $500,000 loan is equivalent to about a 0.10% rate discount in the first year. For many borrowers, this upfront saving outweighs a slightly lower ongoing rate.

Why Most People Don't End Up With the Best Deal

The biggest reason people leave money on the table? They do not compare enough options for what is arguably the largest purchase of their life. This is because its hard. There are over 80 active lenders with over 6,000 home loan products and that makes it very time consuming and tedious, if you plan to DIY. Most brokers search options from 10 to 25 lenders, which is less than 35% of the market. Why? They are limited to lenders who pay them commission and with whom they are accredited. Comparison sites have similar constraints. While they generally show offers from a slightly wider pool, they will generally only display options where the lenders/brokers pay them (advertising fees - or commissions - or both). Typically, you'll be drawn in by seemingly attractive low interest rates, only to discover later that you don't qualify or there's an undisclosed condition. This tactic aims to remove you from comparison shopping and lock you into their process.

Other common pitfalls include:

• Convenience / loyalty tax: Over 60% of homeowners stay with their existing lender out of convenience (slightly easier paperwork). This loyalty often comes with a hidden tax: long-term customers frequently pay higher rates than new customers.‍
• Decision fatigue: Securing a home loan is a complicated and often daunting process. Initially, consumers prioritize finding the 'best' or 'lowest' interest rate. Our research shows that as people progress through the home loan journey, cost importance diminishes for many borrowers, who settle for convenience over savings and just “getting it done”. While many compared multiple loans made decisions based on specific criteria (such as lowest interest rate, minimal fees, or offset account availability), very few conducted systematic comparisons or calculated which loan would prove most economical for them over the long term.

The Smart Way to Find the Best Deal

Step 1: Understand Your Borrowing Objective

What matters most to you?

• Paying the lowest possible cost 
• Borrowing the maximum amount
• Getting approved quickly with minimal paperwork

Typically, there is a trade-off between these three objectives. The lowest-cost product may not allow you to maximize borrowing capacity or might involve a level of financial scrutiny you're uncomfortable with. Knowing your primary objective helps narrow your focus.

Step 2: Know Your Numbers

Before shopping around, get clear on:

• Your loan amount
• Loan-to-value ratio (LVR)
• Credit profile (score and history)
• Income and expenses

These factors dramatically affect what rates and products you'll qualify for.

Step 3: Identify Must-Have Loan Features

Not all loans are created equal. Consider which features matter most to you:

• Variable rate loans or Fixed-rate loans
• Principal & Interest Loans vs. Interest Only repayments Loans
• Offset account or redraw facility
• Package deals with linked credit cards or transaction accounts

Each feature typically impacts the total cost of your loan. For example, a loan product with an offset will generally cost about 0.1% (about $20K for a million-dollar loan for 30 years) more than a loan product without it. This feature only saves money if you have enough savings to park in it. Alternatively, could you just use a redraw facility, which is less convenient than an offset account, but doesn't typically cost more.

Step 4: Compare Widely (But Wisely)

For a thorough comparison, aim for at least 50% coverage of the lenders. You can do this by engaging:

• Two different comparison websites
• At least two mortgage brokers that have different lending panels. Once your contract is signed, run the process with two brokers. The documents required are mostly similar so the extra effort is minimal. This is critical  - you should run the process parallely at least till you see personalised recommendations for you.

Always keep your primary objective from Step 1 in mind when evaluating options. Remember there is no universal best rate or product. The best rate/product for you will be different from your friend’s.

Step 5: Consider using a Home Loan Optimiser

Use a home loan optimiser service like Monetas that does the heavy lifting for you. Monetas compares loans from over 80 Australian lenders, including those who do not pay broker commissions, covering a large part of the market. We calculate the true total cost of each loan for your specific situation and share a portion of our commission with you. Use the savings estimator to get an idea of how much you can save if you use the service.

Plus, we're so confident in our ability to find you the best deal that we offer a unique commitment: If you find a loan with a lower total cost that meets all your needs, we'll either find you a comparable option or give you $1,000. You can always use Monetas in parallel with another broker and see which one provides a better deal.

The Application Process: Setting Yourself Up for Success

To avoid delays and rejections:

• Prepare comprehensive documentation: Recent pay slips, tax returns, bank statements, ID documents, and proof of assets and liabilities
• Clean up your finances: Minimize discretionary spending for 3-6 months before applying
• Allow sufficient time: The typical approval process takes 2-6 weeks

Common reasons for rejection include undisclosed debts, inconsistent income documentation, and recent credit inquiries that cannot be explained.

With Monetas, we streamline this process using open banking tools that reduce the effort required to download, collate, and analyse documents – making approval faster and less stressful.

Final Tip: Review Regularly — Not Just Once

Home loans aren't set-and-forget products. The deal you get today might not be the best in 12 months. The competitive landscape changes constantly, with new products entering the market and rates shifting with economic conditions. Most lenders count on customer inertia, offering their best rates to new customers while existing customers pay more. That's why regularly reviewing your loan is essential.

Monetas customers receive ongoing monitoring of their rate competitiveness, with alerts when it's financially worthwhile to consider switching – ensuring you're never paying more than you should.

It's Easier Than You Think

Finding the best home loan deal doesn't have to be overwhelming. By understanding the true cost of a loan (beyond just the interest rate), comparing options strategically, and staying informed about market changes, you can secure a deal that saves you tens of thousands over the life of your loan.

Get your free total-cost comparison from Monetas. No obligations, no fees to you, and our $1,000 guarantee means you have got nothing to lose.

About Monetas

Monetas is an Australian home loan optimiser that helps borrowers reduce the long-term cost of their home loan. We compare loans from 80+ lenders, including those who don't pay broker commissions. We also have ongoing rate monitoring so your loan is competitive over time. If you find a better deal, we'll match it or pay you $1,000; see our savings commitment for all terms and conditions.