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How we calculate Home Loan Finder Scores

Read full methodology

What different scores mean

9+

Excellent

These home loans offer low costs, coupled with a host of features, giving the best overall value.

7+

Great

These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.

5+

Standard

Usually the home loans would offer above average rates. They may still include some competitive features.

0+

Basic

Higher costs and/or fewer features.

What is Finder Score?

Finder Score is an easy, data-driven way to judge home loans at a glance. Our insights team compares more than 7,000 home loans across 120+ lenders to give each product a score out of 10 comparative to other products of its type.

This means we compare products against others of its type. For example, variable rate home loans against variable rate home loans, and investor home loans against investor home loans. In total, there are 12 different product groupings.

• Product groupings

  • • Variable Rate Owner Occupier, Principal and Interest
    • Variable Rate Owner Occupier, Interest Only
    • Variable Rate Investor, Principal and Interest
    • Variable Rate Investor, Interest Only
    • Fixed Rate Owner Occupier, Principal and Interest, Short Term
    • Fixed Rate Owner Occupier,Principal and Interest, Long Term
    • Fixed Rate Investor, Principal and Interest, Short Term
    • Fixed Rate Investor, Principal and Interest, Long Term
    • Fixed Rate Owner Occupier, Interest Only, Short Term
    • Fixed Rate Owner Occupier, Interest Only, Long Term
    • Fixed Rate Investor, Interest Only, Short Term
    • Fixed Rate Investor, Interest Only, Long Term

We filter the loans in our database for each category so that we're only looking at loans that work for the borrower type. The final Finder Score takes into account the home loan's interest rate, its major fees and the presence of useful features like offset accounts.

The higher the score, the lower the cost compared to other products of its type.

What the Finder Score mean for home loans

• 9+ Excellent - These are the home loans which offer the lowest costs coupled with plenty of features, giving the best overall value.
• 7+ Great - These home loans may have slightly higher interest rates, maybe a fee or two, or fewer features, but overall, a competitive offering.
• 5+ Satisfactory - Usually these home loans would offer above average rates and may still include some competitive features, but they're not the best value for the overall cost.
• Less than 5 - Basic - These home loans have higher costs and/or fewer features than other home loans on the market.

Meet our home loan experts

Richard Whitten

Money editor

Richard Whitten is a money editor at Finder. He has been covering home loans, property and personal finance for the last 6 years.

Graham Cooke

Head of consumer research

Graham Cooke heads up the insights team, overseeing Finder's data-driven research for the last 8 years. He regularly appears as an expert on TV and across other media.

Rebecca Pike

Senior writer, home loans

Rebecca is a senior writer at Finder covering all things home loans. She has been writing about the home loan market in Australia for 5 years.

What is a home loan?

A home loan is the money you borrow to buy a property. You save a deposit first, which is usually 5-20% of the property's value and then you borrow the rest. This is your loan amount or your loan principal.

Your lender charges you interest based on the loan principal amount and your home loan's interest rate. The higher the home loan interest rate, the higher your repayments will be.

How do I compare home loan interest rates?

A good home loan comparison starts with a careful look at interest rates. The lower the rate, the lower your repayments will be.

Let's compare 2 otherwise identical home loans with slightly different interest rates.*

As you can see, with the lower interest rate, you save $739 a month – or $8,868 a year.

*We're using the average owner-occupier home loan size from the ABS, the average variable rate loan in Finder's database of the full market and the lowest variable rate.

Finder's lowest monthly home loan rate tracker

Home loan comparison is hard if you have no clue what a low rate looks like. That's why we analyse all the loans in our database to find the most competitive rates each month.

The graph below shows the market's lowest* fixed and variable rates for home buyers and investors.

*Rates must have LVRs of 80% or higher and exclude unique or unusual loan products that aren't suitable for most borrowers.

Learn more about finding a cheap home loan

How do I compare mortgage fees and features?

Looking beyond the interest rate, you need to compare home loan fees and features too.

Compare the fees

Examples of home loan fees include the following:

• Application fees. This one-off fee can run as high as $600.
• Ongoing fees. Some loans come with a monthly or annual fee, usually worth around $120 a year or $10 a month. Package loans have an annual fee of up to $500.
• Valuation fees. This covers your lender's cost to have your property professionally valued. It can cost several hundred dollars.
• Discharge fees. A discharge fee is only charged when you end a home loan, either by refinancing or paying off the loan.

Consider the features

The following are the most common and useful home loan features:

• Offset account. A 100% offset account is a bank account that is attached to your home loan. The bank account lets you save and spend money like a normal bank account, but any dollar saved in the account offsets your loan amount, meaning you are charged less interest. An offset is not available with every loan, such as fixed rate and basic loans. Many offset loans attract a monthly or annual fee.
• Extra repayments. If your loan allows you to make extra repayments, you can pay it off faster. This will save you in interest charges. These days, most variable rate loans allow extra repayments, although some fixed rate loans don't.
• Redraw facility. A redraw facility is common on home loans that allow extra repayments. A redraw allows you to withdraw extra repayments from your loan and spend them if you need to. Some lenders charge a redraw fee or restrict how much money you can access.
• Split facility. Some loans allow you to split your mortgage into both fixed and variable portions. This lets you create a flexible loan that offers the benefits of both a fixed and variable rate.

Look at a loan's comparison rate

The comparison rate is designed to help borrowers understand the true cost of a loan by adding in fee costs over time. But it's only a hypothetical calculation based on a specific loan amount and term. It's not that useful because every borrower's situation is unique.

You're better off working out how much your loan will cost you every month and factoring in the cost of fees on top of that.

Our Home Loan Awards

Finder's home loans awards celebrate stand-out home loan products across 12 different categories. Our experts analysed 12 months' worth of interest rate and fee data to find the best solutions for any borrower type. Our team of experts reviewed over 3,000 home loan products from across 200+ lenders to select our Finder Home Loans Awards winners for 2024.

View our 2024 winners for our home loan awards

Why you can trust Finder's home loan experts

You pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees. Guaranteed.

You save time. We spend 100s of hours researching home loans so you can sort the gold from the junk faster.

You compare more. Our comparison tools bring you cheaper, better home loans from across the market.

More home loan questions answered

• What's the difference between fixed and variable rate home loans

  You can choose between a fixed interest rate and a variable rate loan.

  Variable rates	Fixed rates
  Variable rates can change at any time, but it's easier (and fewer fees apply) to switch to a new loan or make extra repayments.	Fixed rates don't change but are often slightly higher and less flexible (harder to exit the loan or make extra repayments).

• What's the difference between principal-and-interest and interest-only repayments?

  Most borrowers choose home loans with principal-and-interest repayments. This means you borrow the money (principal) and pay it back each month, plus interest on top.

  There is another option, which is interest-only repayments. This type of home loan starts out cheaper because you don't pay any principal at the start. You just pay the interest charge on top. But later, you'll have to pay the principal back and you'll end up paying more.

  Learn more: How do home loans work?

• What's the difference between a home loan and a mortgage?

  To the ordinary person looking to buy a property, there's usually no actual difference between the words "mortgage" and "home loan". They are used interchangeably to mean the money you borrow to buy a property.

  However, if you want to get very technical, a home loan refers to the money you borrow. The mortgage is a legal document that ties you and your property to the lender. In the event you cannot repay the home loan, the mortgage acts as the lender's security and gives it the right to sell your home to recover your debt.

• How long does it take to get approved for a home loan?

  Home loan approval times vary from lender to lender and also depend on how complex your borrowing situation is.

  A lender may be understaffed or very busy when you apply, and an approval might take several weeks. Some online lenders have developed faster digital approvals that allow them to process an application in a matter of days. A big bank may take weeks to approve a loan.

  If you have all your loan paperwork, financial information and identity documents organised, the approval process might be faster.

• How can a mortgage broker help?

  If you're finding it too hard or confusing to compare home loans, a mortgage broker can help. Brokers are qualified professionals who compare loans for you. They don't compare every loan on the market, but they have access to a panel of up to 30 lenders – and sometimes more.

• How your credit score affects your home loan?

  It's tough to definitively state what the cut-off point is for getting home loan approval, as banks and lenders consider their own internal credit assessments along with your score when reviewing your application.

  However, credit score providers like Experian do have benchmarks that can be useful in getting an idea of how likely you are to be approved for a home loan. Below is a guide of how your credit score could influence your home loan approval odds with Experian, who run their credit scores between 0 and 1000. The higher the number, the better your credit score is.

  Excellent: A score between 800-1,000 is considered Excellent. This means the bank view you as being extremely low risk of defaulting on your loan. If your score is in this range, home loan approval is likely.
  Very Good: A score from 700-799 is considered Very Good and puts you in the second-top tier of creditworthiness. Most lenders would look very favourably on your application.
  Good: A score from 625-699 is classified as Good. This still puts you in good standing and the bank views the likelihood of an "adverse event" occurring on your credit file in the next 12 months to be low.
  Fair: A score from 550-624 puts you in the Fair category. This means you're more likely to suffer an adverse event on your credit file in the next 12 months, so lenders may apply additional loan criteria or charge you a higher rate.
  Weak: Any score below 549 puts you in the Weak category. Lenders consider the likelihood of an adverse credit event high. You may have trouble obtaining finance from traditional lenders.

• How do I compare lenders?

  There are many lenders in the Australian mortgage market. Most of them are regulated as banks, and all of them must follow the National Credit Code.

  • The Big Four banks. The Big Four are the dominant players across Australian banking. Most customers stick with Commonwealth Bank, NAB, Westpac or ANZ. They all offer banking apps, large customer service teams, extensive branch and ATM coverage, and lots of mortgages to choose from. You won't get the absolute lowest rates with the Big Four, but they are always competitive.
  • Other banks. There's more to mortgages than the biggest players, of course. There are state and regional banks as well as nationwide operators and local arms of international banks like ING and Citibank.
  • Credit unions and non-bank lenders. There is an enormous number of Australian credit unions, non-bank lenders, building societies and other institutions that are member-owned. This means they work for their members and don't pay dividends to shareholders.
  • Digital banks, fintechs, neo-banks and online lenders. There are lenders that do business entirely online (with phone support). Lenders such as loans.com.au, Tiimely Home and UBank are examples of online lenders with competitive rates. Some newer players in the market include neobank or fintech lenders like Athena and 86 400, which use apps and big data to offer customers a convenient online mortgage experience.

• Can I trust a smaller lender?

  Banks, credit unions, building societies and online lenders are supervised by the Australian Prudential Regulation Authority (APRA) as authorised deposit-taking institutions (ADIs).

  Lenders are also subject to the National Credit Code, which is administered by the Australian Securities and Investments Commission (ASIC) under the National Consumer Credit Protection Act (2009).

  Some smaller lenders may not be treated as ADIs. The main drawback here is that if you have money saved with the lender (in a savings account or offset), you might not be covered by the bank guarantee if the lender goes bust.

• What is Loan to Value Ratio?

  The loan-to-value ratio (LVR) is another way of defining the minimum deposit you have to save. Banks prefer a maximum LVR of 80%, meaning you need a 20% deposit. Many loans also have a maximum insured LVR of up to 95%. This means that you can get the loan with a smaller deposit, but you will need to pay lenders mortgage insurance (LMI) if your deposit is under 20%. Some professions enable higher LVRs without the need for LMI. Typically these professions include doctors, lawyers and accountants, and more recently police officers, nurses and other university trained occupations, but different banks have different policies in relation to this benefit.

• Can I get a home loan on maternity leave?

  Although you possibly can get a home loan while on maternity leave, lenders may see you as a riskier borrower because your income is reduced. This means you would not be able to borrow as much as you would on a full income.

  There are a few things you could do to improve your chances of being approved:

  • Get documention from your employer detailing the terms of your maternity leave, such as the dates and your salary upon your return.
  • Save at least a 20% deposit.
  • Set a realistic budget and loan amount.
  • Talk to multiple lenders before applying. Too many rejected applications will look bad on your credit report, so be sure you get the answers before you apply.
  • Consider talking to a mortgage broker.

  If you want to increase an existing home loan, you may be able to do this while on maternity leave. The increase would need to be a reasonable amount with a lender who will accept you and you can prove that you can afford it.

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The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our website, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

To make sure you get accurate and helpful information, this guide has been edited by Richard Whitten and reviewed by John Pidgeon, a member of Finder's Editorial Review Board.

Written by

Sarah Megginson

Head of editorial

As an authority on all things personal finance, Sarah Megginson is passionate about helping you save money and make money. She is an editor and money expert with 20 years’ experience and an extensive background in property and finance journalism. Sarah holds ASIC RG146-compliant Tier 1 Generic Knowledge certification, and she's a regular media commentator, appearing weekly on TV (Sunrise, Channel 7 news, Nine news), radio (KIIS FM, Triple M, 3AW, 2GB, 6PR) and in digital and print media. See full bio

Sarah's expertise

Sarah has written 190 Finder guides across topics including:

• Home loans
• Personal finance
• Budgeting and money-saving tips
• Managing the cost of living