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When shopping for home loans, the interest rate is typically the first thing borrowers look at. Indeed, the interest rate has the most significant influence on your repayment costs.
However, it is also essential to look at other aspects, such as your interest rate type (variable or fixed). Also, the purpose of your mortgage (whether you are refinancing an existing loan or buying an investment property or a home) and other loan features you need.
Finding the right home loan involves many elements, so before you jump into the most lucrative interest rate, ask yourself the following questions:
Your need for a mortgage decides the type of home loan. If you’re borrowing money to buy a home to live in, you’ll need an owner-occupier mortgage. If you’re purchasing an investment property, you’re looking for an investment loan.
The rate of interest of investment loans are usually slightly higher than owner-occupier loans. Often an investor will request an interest only loan to keep deductible debt high to maximise tax deductions
If you are borrowing to purchase a home to live in, you will need to explore an owner-occupier mortgage.
If you have an existing home loan that you have not reviewed in the past twelve months, then it is maybe time to look for another lender to get the benefit of a lower interest rate.
You can select between the variable rate and fixed rate for your mortgage.
It will lock you in a particular rate of interest if you choose a fixed-rate loan. Typically, the term lasts between one and five years. It means you will know precisely what your repayments will be each month because the interest rate will be constant for the fixed period.
Fixed rates also attract break costs if you pay them out or make large lump sum payments during the term of the fixed rate period.
The variable interest rate usually offers more flexibility and can change at any time. Refinancing a variable loan involves no breaking costs, and these loans likely to come with specialities like offset accounts and additional repayments.
It is more apt for those who wish to pay off their mortgage as quickly as possible.
Another factor you will have to decide on is the type of loan repayment. You will have two options:
Interest-only Repayments: During the early period of the loan, you can avoid paying off any principal. Instead, you pay the interest charges. Ultimately, you will have to pay back the loan and choosing this option makes the overall loan more expensive.
Principal And Interest Repayments: This option allows you to simultaneously repay the loan principal and the interest charges. It implies your monthly payments are higher, but you will pay less interest in the long run.
Then let’s connect over no-obligation phone chat, and we could help you find a cost-effective loan to suit your requirements.
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”