Take your time to research and explore the different options available to you, to find a home loan that best suits your current financial position, lifestyle and home ownership goals.
When you’re evaluating and comparing mortgages, interest rates are obviously a very important factor to consider. However you should also evaluate rates in context of the other features a loan has.
Some home loans will have access to benefits and extras, others will offer more flexibility, while some will give you the capacity to reduce the interest you pay on your home loan, based on the surplus savings you can put into an offset.
Here are some questions we are frequently asked, and the answers that will hopefully guide you to making a home loan choice that will serve you well over the term of your loan.
Is a cheaper home loan interest rate always best?
A short answer – no. First and foremost, keep in mind that what appears to be the cheapest loan on the market might not necessarily be the best loan for you in the long term. For instance, it may not allow for flexibility if your circumstances change in the future.
Also watch out for 'honeymoon' deals that offer attractively low repayments for the first year or two, but then revert to a higher interest rate that is locked in for the life of your loan, possibly with penalties for making additional repayments or attempting to refinance.
“Sometimes, people choose the cheapest offering right at the beginning, and then three years later, they regret it when the introductory period is over,” says Wendy Brown, Head of Broker Home Loans at Macquarie’s Banking and Financial Services Group.
“It's more about understanding what features are going to be most appropriate for you over the short, medium and long term and what home loans there are out there that meet your needs.”