Some of the best home loans in March 2022

While the Reserve Bank of Australia (RBA) kept the national cash rate on hold this month, some lenders are forecasting that a rate hike could be on the cards as soon as June. Whenever the cash rate increases, you can expect many lenders to hike their variable interest rates accordingly, pushing up home loan repayment costs and bringing down maximum borrowing amounts for first home buyers and other new borrowers.

Owner occupiers looking to buy a property, whether it’s their first home or if they’re upsizing or downsizing, still have plenty of home loan options available to choose from. As well as considering the interest rate, it’s important to look at all the fees, features and other benefits that could  affect the loan’s value, to ensure you select an option that’s the best choice for your financial needs.

One of the simplest ways to find some of the best home loans from different categories is to look at some of the top-rated options from RateCity’s Leaderboards, which rank home loans by their Real Time Ratings™. These star ratings are updated every day and combine the cost and flexibility of each offer into a single rating to help simplify your search.

Some of the best 5 year fixed home loans

Several banks and other mortgage lenders have been raising their fixed interest rates, with Commonwealth Bank and ANZ hiking theirs twice in February 2022.

Fixing your home loan interest rate for a long time may see you paying a higher interest rate today than you may by choosing a variable rate home loan. However, your interest rate and your mortgage repayments will remain the same for up to five years, which may help to insulate you from rising variable rates in the future when the RBA hikes the cash rate.

Some of the best variable home loans

Finding a home loan with a low variable interest rate may be relatively straightforward. Of course, some of the home loans with the lowest rates may not offer as many extra features and benefits as some other mortgage offers. Also, when interest rates start rising, your mortgage repayments will also start increasing, so you may want to check that your household budget can handle it to reduce the risk of mortgage stress.

Some of the best home loans from new lenders

With some of the big banks raising interest rates, especially on fixed-rate offers, it may be worth expanding your home loan comparison to also include some of the alternative mortgage lenders on the market. These may include online-only lenders, app-based neobanks, and customer-owned banks, all of which may be able to offer you a competitive deal. Just be sure to check the rates, fees, features and benefits so you’re confident you’ll be happy with the service being provided.

Some of the best small deposit home loans

Saving a deposit is proving to be one of the most significant challenges for a first home buyer to overcome when applying for a home loan. Thanks to soaring property prices (among other factors), it can take a very long time for a borrower to save up a full 20% deposit on a property.

Some lenders accept applications with a deposit as small as 5% or even 2% of the property value, though the smaller your deposit, the more you may have to pay in Lender’s Mortgage Insurance (LMI). Borrowers may be able to sidestep these LMI costs by applying with the help of a guarantor, or by using government support programs such as the First Home Loan Deposit Scheme or the Family Home Guarantee for single parents.

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