Great Southern Bank Home Loans & Rates Comparison

Great Southern Bank keeps its product lineup straightforward, focusing on variable and fixed-rate options with distinct features to suit different borrower needs:

• Basic Variable Home Loan: A no-frills option designed for borrowers who want a low rate without paying for features they won't use. It allows extra repayments and redraws but does not include an offset account.

• Offset Variable Home Loan: The most popular choice for borrowers wanting flexibility. It includes a 100% offset account, allowing you to reduce the interest charged on your loan by holding your savings in the linked transaction account.

• Green Home Loans (Basic & Offset): GSB incentivises energy-efficient housing by offering discounted home loan rates for properties that meet specific environmental criteria. The "Offset Green" and "Basic Green" loans offer some of the bank's lowest interest rates.

• Fixed Rate Home Loans: Available in terms from 1 to 5 years, providing repayment certainty. GSB allows extra repayments on fixed loans (up to $30,000) without penalty, which is a generous feature compared to many competitors.

• Construction Loans: Available for both owner-occupiers and investors looking to build, with interest-only repayment options available during the construction phase.

Basic Variable Home Loan

The Basic Variable Home Loan is GSB’s lower-rate option for borrowers who don't need an offset account. It offers:

• no monthly or annual fee;

• unlimited extra repayments;

• free redraw of eligible additional repayments; and

• the ability to split the loan.

The standard establishment fee is $600, but GSB is currently waiving it for eligible new applications of at least $100,000. A $235 security administration fee and other charges may still apply.

This loan is likely to suit borrowers who want repayment flexibility through a variable rate but do not expect to hold enough savings to benefit from an offset account.

The gap between the basic rate and GSB's offset loan is small, though, so opting for the offset loan is worth considering if you have savings to play with.

Offset Variable Home Loan

The Offset Variable Home Loan has the same broad repayment features as the basic loan, but adds a 100% offset facility.

Eligible customers can link up to six offset accounts, allowing households to separate money for bills, emergency savings and other goals while using the combined balance to reduce their home loan interest. This is a

The rate premium over the Basic Variable loan is 0.10 percentage points at an LVR of 70% or less and 0.05 percentage points at 70–80% LVR. Whether the offset version is worthwhile will depend largely on the balance kept in the linked accounts.

For example, a 0.10 percentage point rate premium costs approximately $500 a year on a constant $500,000 loan balance. An average offset balance of just over $8,000 would theoretically be enough to justify paying the higher rate.

Great Southern Bank offers fixed terms of one, two, three and five years. There is no four-year fixed option, but that's generally not a popular option with borrowers anyway.

The five-year rate is the standout. At 6.30% p.a. (comparison rate* 7.30% p.a.), it has the lowest advertised five-year owner-occupier principal and interest rate on the HomeLoanRates.com.au database. The three-year rate of 6.35% p.a. (comparison rate* 7.57% p.a.) is also pretty competitive.

GSB is less competitive over shorter terms. Its one-year rate is around the middle of the market, while its two-year rate is slightly above the market median. A number of lenders offer one- and two-year rates below 6.30% p.a.

With GSB's fixed rate loans borrowers can make up to $30,000 in additional repayments during the fixed term. This offers some flexibility but naturally is more restrictive than the unlimited extra repayments available on GSB’s variable loans.

The comparison rates are significantly higher than the initial fixed rates because they account for the variable revert rate and fees under the standard comparison-rate. At the end of the fixed period, the loan reverts to the applicable Basic Variable reference rate unless another arrangement is made.

Eligible borrowers receive a 0.05 percentage point discount from the corresponding Basic or Offset Variable rate when buying or building a qualifying green home, or refinancing an eligible green property from another lender.

The offer is available to owner-occupiers and investors. It produces GSB’s lowest owner-occupier rate of 5.99% p.a. (comparison rate* 6.01% p.a.) and lowest investor rate of 6.19% p.a. (comparison rate* 6.21% p.a.), both on basic loans at 70% LVR or less.

The discount improves GSB’s competitiveness, but is relatively modest. On a $500,000 loan balance, a reduction of 0.05 percentage points would save you around $250 in interest during the first year. A standard non-green home loan from another lender may still have a lower rate.

Great Southern Bank offers basic and offset construction loans for owner-occupiers and investors, with pricing across LVR bands up to 90% in our database.

The rates on its construction are the same as it standard loan rates for all principal and interest and interest-only tiers within each borrower and LVR band. This makes GSB one of the few lenders that doesn't charge a rate premium on construction lending.

GSB’s pricing on its principal and interest investment loan rates is relatively competitive at low LVRs. Its Green Home basic rate of 6.19% p.a. (comparison rate* 6.21% p.a.) is 0.20 percentage points above the lowest investor rate in our database but below the market median. The standard Basic Variable investor rate starts from 6.24% p.a. (comparison rate* 6.30% p.a.).

Its investor Offset Variable rate starts from 6.35% p.a. (comparison rate* 6.41% p.a.), or 6.30% p.a. (comparison rate* 6.32% p.a.) with the Green Home offer. The green offset rate is around the market median, with lower investor offset rates available elsewhere.

Interest-only rates can be considerably higher. For example, the owner-occupier Basic Variable interest-only rate is 6.49% p.a. (comparison rate* 6.23% p.a.) at 70% LVR or less, compared with 6.04% p.a. (comparison rate* 6.10% p.a.) for principal and interest. The equivalent Offset Variable interest-only rate is 6.84% p.a. (comparison rate* 6.40% p.a.).

Great Southern Bank is a credible all-round home loan provider with flexible variable loans, no ongoing fees on its core range and options for borrowers who want an offset, fixed rate, construction loan or green-home discount.

It looks strongest for borrowers with at least 30% equity, eligible green homes and those prepared to fix for five years. Its standard low-LVR variable rates are competitive without leading the market.

Borrowers with a deposit below 20%, those seeking a short fixed term or investors prioritising the absolute lowest offset rate are more likely to find a better deals elsewhere.