The lowest rates from the biggest banks

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Ever wondered which of the high-profile banks offers the cheapest home loan?

You might be surprised to learn that it’s not a member of Australia’s ‘big four’ banks – Westpac, Commonwealth Bank, NAB and ANZ.

Instead, it’s one of the ‘other big four’ banks – HSBC, ING, Macquarie and Citibank.

The winner, it turns out, is HSBC, which is one of the world’s biggest banks.

HSBC’s Home Value Home Loan is currently priced at 3.65 per cent, making it the price leader out of those eight well-known banks (see tables below).

By the way, this comparison assumes you’re an owner-occupier paying principal and interest.

Variable rates – the big four

BankInterest rate
Westpac3.75%
Commonwealth Bank3.89%
NAB4.17%
ANZ4.30%
Big four average4.03%

Variable rates – the other big four

BankInterest rate
HSBC3.65%
ING3.69%
Macquarie3.69%
Citibank4.26%
Other big four average3.82%

Let’s do some number-crunching. Imagine you took out a $350,000 loan over 30 years. And imagine that your two options were HSBC’s Home Value Home Loan and the average big four loan.

Here’s how your repayments would look under those two scenarios:

Monthly repaymentsTotal repayments
HSBC (3.65%)$1,601$576,399
Big four average (4.03%)$1,677$603,725
Difference$76$27,326

It’s important to note that interest rate isn’t the only thing to consider when you take out a home loan.

You should also weigh up a range of other factors including fees, features, repayment rules and customer service.

That said, the numbers clearly show that HSBC is currently undercutting ANZ, Commonwealth Bank, NAB and Westpac.

So if you’re in the market for a home loan, you might want to broaden your search by including not just the traditional big four banks but also the other big four.