What to consider when shopping for a better home loan
Saturday 2 July, 2016
Nick Reade, Chief Executive BankSA
With interest rates at historic lows, now is certainly a good time to take out a home loan or to refinance an existing one.
However, with a lot of attention currently focused on finding the lowest interest rate, always be sure that you’re comparing like with like when considering the different home loan options available on the market to avoid any nasty surprises down the track.
For example, always consider the ‘comparison’ interest rate shown beside the advertised interest rate. The comparison rate takes into account the fees and charges relating to that particular home loan, in addition to the actual interest fees you will be charged.
So if one lender advertises a headline interest rate of 4.5% but with a comparison rate of 6.0%, you may be better to consider an alternative lender who advertises an inferior headline interest rate of 5.0% but that includes a more competitive comparison rate of 5.5%.
While finding a competitive interest rate for your home loan is obviously important, it shouldn’t be the only factor in your decision-making process.
Be sure to check and compare any upfront, ongoing or early repayment fees attached to the loan. Also, consider the product features that may be important to you such as offset accounts or redraw facilities, and repayment flexibility.
Also, some home loan providers now do not have a large physical presence, or a physical presence at all, so be sure to check whether there’s a branch or ATM network available if a physical or face-to-face service presence is important to you.
Always do your research, shop around, read the fine print and get input from a trusted advisor to help you choose the right home loan to suit your lifestyle and future plans.
To discuss a home loan option that suits your personal circumstances, contact BankSA (13 13 76) for a local lender who will be able to help.
0466 320 662
0478 335 544