Buying guide
What are home loan interest rates and how do they work?
A quick, jargon-free guide to the cost of borrowing.
AI summary
A home loan interest rate is the cost of borrowing money from a bank to buy a house. The amount you pay is influenced by your loan size and the Official Cash Rate (OCR) set by the Reserve Bank.
You can choose between two main types:
- A fixed rate offers payment certainty for a set term.
- A floating rate moves with the market, allowing penalty-free extra payments.
You can also split your loan for a balanced approach.
What you’ll learn:
What are home loan interest rates, and why do banks charge them?
You need to be aware of home loan interest rates when budgetting for your home.
How are mortgage interest rates calculated?
You'll need to decide if you'd prefer a fixed or floating interest rate.
Fixed and floating interest rates explained
Floating interest rates
Fixed interest rates
A bit of both
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