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Every borrower’s situation and circumstances are different.

For many people, securing the best mortgage rate isn’t about finding the lowest rate around — each buyer's situation and circumstances are different, and what works for one borrower may not work for another.  

Financing your property purchase can be a confusing and complicated process. This guide is designed to help you understand the mortgage rate landscape, and how to secure the best loan for your needs.

Tip #1: Ensure your credit rating is good

When it comes to securing a low mortgage rate, you need to be in the best financial position to do so. You can strengthen your credit rating by always honouring your financial commitments — like paying bills on time, having a saving regime in place, and making wise financial decisions. The recent introduction of Comprehensive Credit Reporting means lenders are able to assess your financial behaviour in its entirety, and this includes small things such as paying your phone bills on time. Ensuring you are financially responsible will help you secure the best home loan rate.

Tip #2: Think about the type of loan you need: Fixed-rate vs variable-rate loans

There are two main types of loans available: fixed-rate loans and variable-rate mortgage loans. There are benefits and drawbacks for each type, so it’s important to understand exactly how they work.

Fixed-rate loans

Fixed-rate loans have a mortgage interest rate that remains locked-in throughout the duration of the loan, so borrowers with a conservative risk appetite may find fixed loans appealing.


  • You can budget with ease because you’ll always know the value of your repayments
  • Any interest rate rises won’t affect you as your rate is locked in


  • If the interest rate drops, your fixed-rate loan will remain the same, and you could be paying a higher level of interest over the long-term
  • You could be limited when it comes to making additional interest repayments — these aren’t typically allowed in fixed-rate loans. If they are, they’re often capped at a certain limit or can incur additional fees
  • You have limited access to redraw facilities
  • Fixed loans are harder to refinance and break fees may apply

READ MORE: See our ultimate guide to fixed-rate home loans here

Variable-rate loans

When it comes to variable-rate loans, the rate moves with the market and is suited to those that are happy to take on a bit of risk.


  • You can make additional repayments on your variable-rate loan without any additional costs
  • You have unlimited redraws and can save interest through an offset account
  • It’s easier to refinance with a variable-rate loan, making it easier to switch lenders


  • You don’t have any control over the economic conditions that influence interest rates, making it more difficult to budget and plan out your repayments.
  • You could be susceptible to mortgage stress if you have low financial means to meet your mortgage obligations if the interest rate rises sharply.

It’s possible to blend these two mortgage types, so work out which is the best option for you. Many people choose to take out the majority of their loan with a fixed-rate, and a smaller percentage with a variable rate. This kind of option gives you a little more flexibility when it comes to repayments.

READ MORE: See more about variable-rate loans here

Tip #3: Assess the size of your down payment or deposit

Most lenders require a 20% down payment or deposit, meaning they’ll loan you 80% of the property purchase price. With the continual rise of house prices, this makes it harder for the new generation of prospective homeowners.

There is some good news —  some lenders, under certain circumstances, are willing to loan up to 95% of the purchase price. The caveat is most of them require mortgage insurance and issue higher mortgage interest rates. So while this might seem like a good offer, the reality is these types of loans can place borrowers under financial strain down the track.

Borrowers who are unable to meet the 20% deposit requirement could also look to a guarantor loan, where a guarantor offers part of their home equity to top up your cash deposit.

READ MORE: Learn more about guarantor loans here

Tip #4: See if you are eligible for special mortgage programs

There are a number of special programs that offer mortgage rate discounts and lenders mortgage insurance waivers. You may be eligible for these benefits, if you are a:

  • Current or former member of the Australian Defence Force
  • Medical professional
  • Certified Practicing Accountant or CPA
  • Lawyer and solicitor

Generally, these programs require borrowers to meet certain criteria, so it's best to consult an expert mortgage professional who can talk you through what’s required.

Want to get the most competitive mortgage rate out there? See how Joust can help here.