Cheapest Home Loans In Melbourne 2022

Break Free Home Loans are a leading Melbourne mortgage broker, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs. We work closely with clients as trusted advisors and are accessible to clients when needed.

Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.

Are you looking for the cheapest home loan in Australia? Our experienced brokers can help you compare cheap mortgages from different Aussie lenders. Whether you’re a first time home buyer or an investor, we can help you find a loan that suits your borrowing needs. Apply with us today to secure the cheapest home loanwith the features you need, the best repayments and fees.

Where To Find The Cheapest Home Loan?

Break Free Home Loans work with a network of cheap home loan lenders. When you’re looking for cheap home loans with great interest rates, our brokers continuously monitor the mortgage market and compile a list of the most competitive private lenders in Melbourne Australia. We analyse cheap mortgages from their comparison rates, features, loan terms and eligibility criteria to find the cheapest home loans on the market. We are able to track the market’s lowest rates and give borrowers a clear outlook on their best choice. More importantly, we can help you submit a loan application that gets you your best chance of approval.

At Break Free Home Loans we can connect you to:

  • Australia’s big banks such as Commonwealth, Westpac, NAB and ANZ
  • Online lenders
  • Fintechs and neobanks
  • Small lenders including local credit unions and customer-owned banks
cheapest home loan

What Are The Cheapest Home Loans In Melbourne?

From fixed or variable, to interest-only or principal and interest, finding the cheapest home loan depends on the type of loan you choose.
cheap mortgages
  • Fixed home loans: Fixed rate home loans allow borrowers to lock in interest rates for the loan period. Regardless of any change in RBA cash rate or the lender’s variable rates, your repayments will stay the same over the course of the fixed term. This allows you to hedge against future rises.
  • Variable home loans: Variable home loan interest rates will fluctuate according to the lenders and the market. This makes your repayments vary. Variable loans tend to have more features than fixed rate loans, though interest rates are often higher.
  • Split rate home loans: A split rate home loan allows a customer to pay a fixed rate on part of their home loan term and a variable rate for the rest.
  • Principal & interest loans: Cheaper home loans are usually available for principal and interest loans compared to interest only repayments. This is because the loan repayment on a principal and interest mortgage accounts for the outstanding debt. If you’re only paying interest but the loan amount remains unpaid, your debt is not reduced. This poses a greater risk for the lender if you suddenly can’t meet your repayments and decide to default.
  • Interest-only home loans: The borrower only needs to pay back the interest on the loan for the first few years, before the loan reverts to principal and interest repayments. This leads to lower repayments in the short term, but interest-only loans tend to be more expensive in the long run.

What To Consider When Determining The Cost Of Home Loan?

These are some things to consider when looking at the cheapest home loans Melbourne finance options:

Interest Rate

The interest rate of your home loan will determine its affordability.

Variable Home Loans

When you choose variable home loans, your repayments will fluctuate according to the market rate. When interest rates are high, you will end up paying more, but you may also take advantage of the bottom of the market rate. It’s usually more difficult to budget with variable repayments.

Fixed Home Loans

Fixed home loans allow your repayments to stay the same over the life of the loan. This makes for more manageable repayments. However, fixed home loans tend not to offer as many features compared to variable loans.

Deposit Size / LVR

Your deposit size and loan-to-value ratio are other factors to consider when searching for the cheapest home loan. This refers to the difference between the amount you borrow and the value of the property represented as a percentage. Generally, the lower the LVR, the cheaper the mortgage.

Lenders will view you as lower risk when you save a bigger deposit or build up some equity in your home. In fact, when you save up a 20% deposit and have an LVR of 80%, you can avoid costly Lenders Mortgage Insurance. LMI is additional insurance paid to the lender to protect them at the risk you’ll default.


If the lender charges higher than average fees, a ‘low rate’ loan can quickly turn expensive. Your loan’s fee structure will contribute to the overall cost of the mortgage. You need to consider any upfront fees like application fees, ongoing fees like annual fees, penalty fees for extra or late repayments and more.

Repayment Frequency

Your repayment frequency will determine the flexibility of the loan. As loan interest is compounded daily, how often you need to make repayments will reduce not only the principal amount, but the interest you’ll pay. Switching from monthly to fortnightly repayments for instance may help you minimise the overall cost of the loan.

Loan Term

Your loan term is the period of time you have to repay the full cost of the loan. Usually, this is around 25 years. Longer loan terms mean your monthly repayments are smaller, but you’ll be paying more interest over the life of the loan and vice versa.

Additional Terms

This includes features such as the ability to make additional repayments, access a redraw facility or an offset account. Some home loan packages may even offer bundled credit cards, transaction accounts and a line of credit.

Cheap Home Loans For Different Categories In Melbourne

Different customer categories may affect the cost of the loan. From new home loans to investor home loans, the following are some popular loan categories:
New home loan customers: Lenders typically reserve the cheapest rates for new customers. They will use the ‘loyalty tax’, enticing customers with cheap rates onto their books. Whether you’re a first home buyer or looking to refinance, you may be eligible for new home loans.
Owner-occupied loans: Owner-occupied home loans usually come with lower interest rates than investor home loans. Lenders believe there is less risk of default on mortgage because the homeowner intends to live in the home than rent it out for income. Owner-occupied loans can be broken down further based on the borrower’s intention with the property. They can choose to take out a loan to buy their first home, buy another home, build a home on vacant land, or to refinance an existing home loan. First home buyers are usually at an advantage to be eligible for discounts and special offers.
Investor home loans: These are loans for property investors who will rent or sell the property they’re buying for a profit rather than live in it. Both owner-occupied and investor home loans offer fixed, variable or split rates and principal and interest or interest-only repayments.

How Much Can You Borrow?

How much you can borrow will be determined by the lender’s assessment of your income and financial ability to repay the loan. Lenders will review your credit score, credit history, any outstanding consolidation debts, equity and assets you have. Your personal financial circumstances, the specific lender you choose, their lending policies and loan product will affect your borrowing limit.

How To Get Cheap Mortgages?

The following are some tips we recommend to get the best rates on your mortgage:

Credit History

Finance providers will be more likely to lend you money if you have a good credit history. If you don’t have any credit history, try to get a credit card and use it responsibly. They will check if you have any missed payments or defaults to see if you can manage credit responsibly.


If you can’t get a loan on your own, try finding someone who is willing to act as a guarantor or co-sign for you. This could be a parent, grandparent, or other family member. Keep in mind that whoever co-signs or guarantees the loan will be responsible for it if you can’t make the payments.


Lenders and finance companies will always check to see how much money you have saved. They want to know that you are committed to the property purchase and have the capacity to make repayments should interest rates rise. The larger your low deposit, the better.

Stable Income

Home loan lenders will check your employment history to make sure you have a stable income.


Lenders like stability. They want to see that you have been in continuous employment for at least 6 months. They will look at your current asset position and may require a larger deposit if you have limited assets.

Have Any Questions?

Got any questions? We can help. Our brokers can compare loan products from different lenders and help you find the best finance option to suit your financial circumstances. We can check your eligibility to see if you satisfy the conditions of your desired loan. To begin your application, speak with one of our experienced brokers today. We can help you build a strong case for your loan approval even if you have no deposit home loans.
cheapest home loans melbourne

Frequently Asked Questions

From lending criteria to tips and considerations when applying for home loans, these are some of our most frequently asked questions:

Which Bank Provides The Cheapest Home Loan?

The answer to this question depends on a few factors, including the type of home loan you are looking for and the current market conditions. It’s always a good idea to compare different home loan offers from a variety of lenders before making a decision.

Which Home Loans in Melbourne Are Cheapest?

When it comes to finding the cheapest home loan, there are a few things you need to consider. The first is the interest rate. Home loan companies offer different interest rates depending on your credit score, employment history, and other factors. You’ll want to compare rates from several different lenders to make sure you’re getting the best deal possible.

The second thing to consider is the fees and charges associated with the loan. Home loans often come with a range of fees, including application fees, origination fees, and closing costs. Make sure you understand all the fees before you apply for a loan so there are no surprises down the road.

Finally, you’ll want to consider the terms of the loan. Home loans typically have terms of 15 to 30 years. You’ll need to decide how long you want to be paying off the loan and make sure the terms are agreeable.

How To Get Cheap Mortgage In Melbourne?

Lenders will calculate the loan-to-value ratio (LTV) which is the percentage of the property value that you are looking to borrow. A higher LTV will usually result in a higher interest rate as it is seen as a higher risk to the lender or finance company.

You can lower your LTV by either saving up a larger deposit or finding a guarantor for your loan. When you co-sign your loan with a guarantor, lenders will see you as a lower-risk borrower. However keep in mind if you default or fail to make your repayments, the guarantor will be responsible for the loan. This may strain your relationship with them so you have to be confident you can repay the loan.

Contact our team

We love to hear from each and every one of you. Please feel free to reach out to us today!