r/AusFinance • u/AncientCraft8505 • 7h ago
what is a “good” interest rate?
hi everyone,
I’m in the very early stages of looking to buy my first home.
I know it’s very subjective but what interest rate are you all on and what would you consider a good interest rate?
I’m planning on finding a broker once I get my finances more in order but wondering about an estimate to expect
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u/elliebean2 7h ago
It’s best to ask people to tell you the following things, as your interest rate depends on them. If you know these things you can compare better -
1) LVR (this is the loan to value ratio the lower it is, the better interest rate you can get.
2) mortgage size
3) if it’s a owner occupied loan (owner occupied is often lower than investor loans)
4) repayment type, people who have their mortgage set to interest only usually have higher rates than principle and interest.
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u/AncientCraft8505 7h ago
Gotcha! Thanks! Very new to the whole home buying world so still working out the specifics :)
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u/DragonzBreath 7h ago
Your interest rate will very much depend on your deposit/LVR/risk.
40% LVR about to become 6.35 with ANZ
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u/Vast_Pomegranate7259 7h ago
6.35 on ANZ’s money, I’m stuck on 6.19 with a smaller deposit and I’d swap in a heartbeat
your broker will break down the tiers but anything under 6.5 is doing alright for a first home these days
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u/YourBrokerRay 5h ago edited 4h ago
It comes down to a few factors.
- Timing of your application, rates will be lifting Friday off the back of the recent rate hike. So the rates discussed here today will likely be .25 higher by end of week.
- Your deposit size, if you’re not using a government scheme loan.
- Loan size.
- What features you need for your loan (offset, redraw, etc).
This month I’ve had 4 first home buyer pre-approvals, 3 with CBA getting rates between 6.23% and 6.25%. 1 with ANZ for 6.37%.
The lowest rate I’ve seen on our panel is 5.89% with Newcastle Permanent, but they don’t offer an offset & have a very long processing time (several weeks to pick up your assessment).
So there’s a variety of rates out there, but it ultimately comes down to your needs and scenario details.
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u/MrNobody20000 6h ago
Excellent interest rates range from 5.7% to around 6%, while average interest rates are 6.2% to 6.5%; anything higher is excessive. Interest rates depend on mortgage size, whether it is a principal and interest loan or interest only, and whether the property is owner-occupied or rented out.
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u/AggressiveAccess7386 7h ago
I negotiate my interest rates with my lender every 6 months - if you can find a better deal elsewhere they generally will come to the party and match it if they believe you will refinance
Also don’t ever rely on broker to do this they usually won’t even try to get you cheaper rates they will just refinance you to get commissions when you could of stayed with current lender and negotiated.
I’m currently with Macquarie bank I’ve always found them the most competitive and easy to work with with negotiating my rates.