There are many eye opening interest rates being advertised lately, but getting the right home loan tailored to your specific needs and circumstances is more valuable than just the lowest rate on the market.
Yes acquiring the cheapest interest rate possible is obviously an important component to saving money, but there are also many other factors involved with a home loan that may determine if that cheapest rate is actually suitable for your own situation.
Some of the cheapest rates on the market could be fixed, or the discount might only last for a specified period of time, or it might not allow the flexibility you desire with additional features & facilities.
Below we summarize a few things for you to consider for those market leading home loan interest rates out there:
Fixed interest rate loans
A fixed interest rate loan could be considered if the following apply to you:
• You require certainty of the repayment amount each month
• You are an investor looking to achieve a fixed return on your investment
• You believe interest rates may rise significantly in the future
You should also consider monthly & annual fees or if break costs apply. Fixed rates may also cap the amount of additional repayments allowable, or exclude a linked 100% offset account. Consider if the market leading fixed rate allows for renegotiation of the interest rate at the end of the fixed period, and if that will that cost you a fee.
Variable interest rate loans
You could consider a variable interest rate loan when:
• You want ultimate flexibility with your loan
• You want to be able to make large principal repayments on your loan through a redraw facility
• You have the capacity to absorb increases in interest rates without undue hardship and conversely, benefit from any rate decreases
Some of the cheapest variable rate loans on the market also come with the benefit of no monthly & annual fees but they may not allow for a linked 100% offset account. Alternatively that rate might only be applicable when included with a more expensive ‘package’ home loan with a monthly or annual fee that also involves a credit card and offset account that you might not require.
You might also want to consider any ‘discount period’, where by the interest rate only features the market leading discount for a nominated period of time before it will increase to something that is far less competitive and beneficial.
When looking at the fine detail of the eye-opening rates out there, it becomes clear that some of these home loan products aren’t all that appealing or accessible for everyone. They could be for new to lender customers only, require a minimum loan amount to be borrowed or restricted by a low loan to value ratio. They might also include expensive loan application fees, or a monthly/annual fee that really isn’t that appealing when looking at the overall picture.
A Mortgage Broker can reveal the devil in the detail for you, and give you a wider comparison of other suitable products that you may not have seen. All that takes is a phone call to 8300 8300 to speak with a Bernie Lewis Home Loans Mortgage Broker today.
*The information provided in this article is general in nature and does not take into account your personal circumstances. Since everyone's personal situation is different, this article should not be taken as advice. The figures used in this article are to be used as a guide only. Depending on your personal circumstances, these numbers may vary. We recommend you seek individual advice with a mortgage broker.