How we work out the typical home loan gap

The figure on our home loans page is the difference between what lenders charge in the middle of the market and the cheapest comparable loan we can see, priced at one stated loan size. It describes published rates. It is not an estimate of your loan.

The loan we price it at

Every dollar figure assumes a $600,000 loan. The gap scales directly with the loan size - on half that balance it is roughly half the money - which is why the amount is stated inside the sentence rather than hidden in a footnote. $600,000 is a reference figure we have chosen and disclosed, not a claim about the average Australian mortgage.

Which loans we compare

Owner-occupied, principal-and-interest, variable-rate loans only. Mixing investment or interest-only loans into the same figure would compare products that are priced differently by design. We use each lender's published comparison rate rather than the headline rate, because fees belong in the comparison.

We exclude products that aren't generally available - hardship programs, staff-only loans, defence and purpose-restricted lending such as green or construction-only loans - because a rate you cannot switch to is not a rate you are missing out on.

One rate per lender

Each lender is counted once, using its cheapest qualifying loan. If we ranked every product instead, a lender publishing forty loans would weigh forty times more than one publishing a single loan, and the figure would describe big lenders' catalogues rather than the market.

Because each lender is represented by its lowest-rate offer, this tends to understate the gap: if you are on your own lender's dearer product, your own gap is likely wider than the figure shown.

The percentiles

We sort those rates and take the 25th and 75th percentiles - the middle half of the market. A quarter of lenders are cheaper than the low end, a quarter dearer than the high end. Each is measured against the cheapest comparable rate and converted to dollars a year on the $600,000 balance.

We publish a range rather than a single number because there is no single typical borrower: what you are overpaying depends on the rate you happen to be on.

What the figure leaves out

It is a rate comparison and nothing more. It does not account for fees beyond those already inside the comparison rate, features such as offset or redraw, the cost of breaking a fixed term, your loan-to-value ratio, or any lender's credit policy - all of which decide what you would actually be offered. Comparison rates themselves are a standardised illustration, not a quote.

Where the data comes from and when

Every rate is published by the lender under Australia's Consumer Data Right and refreshed daily. The figure is recalculated on each run and stamped with the time that run finished - which is what "read this morning" refers to. If that reading is more than 48 hours old, or a run has not completed, the statement disappears from the page entirely rather than showing a figure we cannot source.

The savings figure on the home page

The card on the home page answers a narrower question: how much smaller is the principal-and-interest repayment on the lowest published headline rate among products from the lenders included in this comparison than on the average rate borrowers are paying, over a year. It is a DIFFERENT figure from the gap above and is worked out differently, so it is set out here in full.

The card prints its loan size ($600,000), the average it measures from, the lowest rate it measures to and that rate's own published comparison rate, the lender and product the lowest rate belongs to, how many lenders were compared, and the time their rates were read (4:19am on 30 September 2026, Sydney time). The rest of what it assumes is here:

• The average. "Average" is the average variable rate on outstanding owner-occupier home loans, all lenders: 6.20% as at 31 July 2026, published by the Reserve Bank of Australia, Statistical Table F6 (Housing Lending Rates), series "Lending rates; Housing credit; Outstanding; Owner-occupied; Variable-rate; All institutions" (FLRHOOVA). It is the rate existing borrowers are paying, which is what a switch is measured from. We copy it in by hand when the Reserve Bank publishes the next month (last checked 26 September 2026); it is not read from lenders' feeds.
• The lowest. The lowest published headline rate among owner-occupier loans from the lenders in this comparison that are generally available and publish a comparison rate. A product without a published comparison rate cannot be the lowest; the next product that has one is used instead. The comparison rate shown beside it is that product's own, never the interest rate standing in for it.
• A 25-year term. We do not ask, because it is a number most borrowers do not have to hand and the estimate barely moves across plausible answers.
• Both repayments come from the same standard principal-and-interest formula. The figure is twelve months of the difference between the two monthly repayments - nothing more.
• Headline interest rates on both sides. The same quantity as the rate on a loan contract, so the subtraction compares like with like. Comparison rates fold statutory-example fees into the percentage - a different quantity - so they are what our lists display and sort by, and never one side of this figure.

It does not assess eligibility, fees, switching costs, break costs on a fixed rate, lender's mortgage insurance, or anything priced on your circumstances rather than published. It is arithmetic on published terms, not a quote, and not a prediction about your loan.

The wheels beneath the annual figure show that year's saving accruing across today, from midnight. They are the same figure divided by the seconds in a year - evidence that it is a running cost, not a second claim.

This is general information about published rates. It doesn't consider your circumstances, and it isn't financial advice. Confirm any rate with the provider before you act on it.