What you need to know about home loans in 2024

Deciding on a home loan is never an easy undertaking. When adding it to the growing checklist of things to do to either jump on or move up the property ladder—amid rising interest rates and soaring property prices, nonetheless—doing your home loan due diligence is imperative in order to gain the greatest benefits your individual circumstances.

In 2024, the average home loan in Australia was $615,174, showing a 2.3% increase when compared to January 2023, according to the Australian Bureau of Statistics (ABS) data. For first-time home buyers, the average loan amount rose from $485k to $514k, revealing borrowers are taking on bigger debts than ever before to secure their dream of home ownership.

For those seeking to refinance their mortgage, activity remains high as borrowers look to switch lenders to better manage persistently high interest rates. In June 2023, the value of total refinancing between lenders was 12.6 per cent higher compared to June 2022, according to ABS data.

While Australian borrowers started the year with a 4.35 % rate, Dean Sacco, director and finance specialist at Urban Finance Co, says that the Reserve Bank of Australia has changed its language in recent months, with the expectation that the cash rate has peaked, giving buyers more confidence with their home loan repayments.

“Low stock levels are proving difficult for buyers but those who are motivated, with good incomes and good credit, will be successful in 2024,” says Sacco.

Here’s what you need to know.

What is a home loan?

When purchasing a home, a bank or a loan provider will lend money to the borrower in order to finance the purchase of a property. This is what home loan is, at its core. Of course, home loans come with certain caveats, such as a timeframe that the lender and borrower will agree on for the loan to be paid back. A payment schedule will also be decided on, which could be fortnightly or monthly, which can impact the amount of money repaid over time. And in addition, a borrower will be required to pay interest, which will be determined by the lender.

And what is refinancing? How does it work?

In its simplest form, refinancing is when you switch from your current loan to a new one, either with the same provider or a new one in order to obtain better terms on your mortgage. There are two types of refinances, which include external refinance, when you leave your current lender and switch to a new lender, and internal refinance, when you stay with your current lender, but make changes to your loan agreement.

In 2024, which bank is best for refinancing options?

While each case will be different and specific to the individuals at hand, according to Sacco, there are several banks in Australia currently offering great cashbacks for refinancing, such as ANZ and ME Bank.

“Gateway Bank, Heritage Bank and Adelaide Bank are also offering some competitive variable rates at the moment for owner occupiers,” he adds. “And Teachers Mutual, Beyond Bank and ubank are offering some competitive variable rates at the moment for investors.”

Is it better to refinance with the same lender?

If you’re looking to refinance, often, you can avoid certain refinancing costs if doing so with the same lender, but it’s always smart to shop around and compare offers available. When looking to refinance, certain lenders will also offer competitive products and rates which could prove beneficial.

Is it good to refinance a loan?

At the end of the day, you want your loan (your mortgage) on terms that work best for you. Refinancing a loan allows you to obtain better terms on your mortgage, and in the process, can not only save you money but can help you pay off your home loan sooner. “You can also access equity to pay out higher interest debts, purchase a car or invest in property,” adds Sacco.

There are some drawbacks, however. Most notably, the potential for refinancing fees which, in some cases, are unavoidable.

Does refinancing hurt your credit?

There’s a misconception that refinancing automatically affects your credit score – it’s not always the case.

“Multiple credit enquiries in a short period of time or applying for buy now, pay later debts are two examples that lower your credit score,” explains Sacco. “This signals to new lenders that you are potentially a higher risk borrower.”

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If you are looking to for the very best home loans to consider right now — or perhaps looking to refinance to suit your current needs — here are ten home loans to consider in 2024.

1. ANZ

Variable home loan
Variable rates from 6.64% p.a.
No ongoing fees
$0 ANZ set up

2. ubank

Variable home loan
Variable rates from 6.14% p.a.
Free extra repayments
$0 application
$0 ongoing fees
Redraw available

3. Macquarie Bank

Fixed home loan
3 year fixed rates of 5.99% p.a
$0 application fee
$0 ongoing fee

4. IMB Bank

Fixed home loan
2 year fixed rates of 5.99% p.a
$449 application fee
$0 ongoing fee
Eligible refinancers can get $2,000 cashback when switching their loan of at least $500k to IMB

5. ING Bank

Variable home loan
Variable rates from 6.14% p.a.
$0 application
$0 ongoing fees

6. Bendigo Bank

Variable home loan
Variable rates from 6.01% p.a.
$0 application
$10 per month ongoing fees
Redraw available

7. Newcastle Permanent

Variable home loan
Variable rates from 6.04% p.a.
$595 application fee
$0 ongoing fees
Eligible refinancers who apply online and borrow $250K+ (LVR 80% or lower) can get a $3,000 cashback

8. BCU Bank

Fixed home loan
2 year fixed rate of 5.99% p.a.
No establishment or annual ongoing fee
5% deposit required

9. HSBC

Variable home loan
Variable rates from 6.09% p.a.
Enjoy free extra repayments, online redraw and no ongoing monthly service fees

10. UP

Fixed home loan
4 year fixed rate of 5.80% p.a
10% deposit required
No application, monthly or annual fees

Talk to a broker or financial advisor for advice specific to your needs

Borrowers cannot control the Reserve Bank, but they can control how exposed their household budget is to its next decision.

The RBA meets on 29 September with inflation concerns still elevated and major-bank economists increasingly bringing forward their rate-rise calls. Fixed mortgage rates have also been moving, reducing the value of waiting for perfect certainty.

The first task is to calculate the impact of another 0.25 percentage-point increase. Indicative Canstar figures reported earlier this month suggest that such a move would add about $91 a month to repayments on a $600,000 loan, $122 on $800,000 and $152 on $1 million, although actual changes depend on rate, term and loan structure.

The second task is to compare the current loan with the market. Borrowers should examine the interest rate, annual package fee, offset balance, redraw rules and the revert rate on any expiring fixed portion. A lower advertised rate is not necessarily a better deal after fees, lost features or refinancing costs.

Third, test the household budget at least one percentage point above the current rate. This is not a forecast; it is a resilience exercise. Include council rates, strata, insurance, maintenance, school costs and realistic discretionary spending. Investors should also allow for vacancy and repairs rather than assuming uninterrupted rent.

Fourth, contact the existing lender before lodging multiple applications. A borrower with a sound repayment history may be able to negotiate a discount without refinancing. If the offer is weak, obtain comparable quotes and seek advice on whether changing lenders will genuinely improve the position.

Fifth, preserve liquidity. Using every available dollar to reduce principal may feel prudent, but an offset account can provide interest savings while retaining access to cash. The right structure depends on tax position and loan purpose, particularly where owner-occupied and investment debt coexist.

Borrowers considering a fixed rate face a trade-off. Fixing can provide repayment certainty, but may restrict additional repayments, offsets or early exit. Splitting a loan can diversify rate exposure without removing risk.

The worst time to examine a mortgage is after repayments have become unmanageable. A review conducted now gives borrowers more choices: renegotiate, refinance, adjust spending or build a buffer while their record remains strong.

Borrower checklist

Calculate: Repayments after a 0.25 and one percentage-point increase.

Compare: Rate, fees, offset, redraw, cashback conditions and total cost.

Review: Fixed-rate expiry, interest-only expiry and remaining loan term.

Protect: Emergency liquidity and insurance.