Which basic variable loan saves you $22,284?

While the comparison rate can be a useful tool, Your Mortgage has gone even further and developed its own method to uncover the true cost of a mortgage.

The team at Your Mortgage has worked out the 'true cost' of the 17 basic variable products from the banks and 22 products from non-bank lenders in our books, by taking into account each and every fee, including upfront, ongoing and deferred establishment fees as 19 November 2008.

By working out how much a given loan will cost you after a range of time periods - three, five and 10 years - we show you the impact that these fees can have on the total cost of your mortgage. By adding all fees to the cost of principal & interest (P&I), we calculate the true cost of a mortgage over three, five and 10 years. This month, we have based our calculation on a loan amount of $300,000 at 80% LVR taken over 30 years.

And the winner is...

The claim "home loans with the lowest rates in Australia" can be substantiated, it seems, by Wizard Home Loans' multi-award winning product, the Rate Breaker loan, emerging as Australia's best value basic variable loan in the non-bank category.

With a headline rate of 6.33%, the Rate Breaker carries the lowest rate among the top-ranking basic variable rate products in this month's competition. The product will cost you the least over three years compared to the average cost of the average loan in our books, even with a deferred establishment fee of $2,150 which would apply if you chose to refinance at that time.

Over the three year period, customers are poised to save $5,153 compared to the average loan in our database. The longer you hold, the bigger the savings potentially are. Over five years, you could save $10,967 and $22,284 over 10 years.

St.George Negotiated Basic Variable loan topped the bank category with a headline rate of just 7.02% - the lowest of the bank products. St.George's product carries the lowest fees with a total upfront cost of just $100, no ongoing fees and just $350 exit cost.

Over three years, the St.George product could save you $2,896 compared to the average cost of this type of loan in the Your Mortgage database. Over five years, this savings goes up to $3,379, and to $6,351 over 10 years.

For the complete list of top-ranking basic variable rate products, read the latest issue of Your Mortgage magazine, on sale from 6 February 2009.