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Secure the Best Home Loan for Your Property

When you buy a home, you want to make sure that you get the best home loan possible. Read expert advice on home loans from one of the great experts recommended by Affinity Property, Eleanor Crosby.

Or, call us now on 07 3293 9100

Eleanor Crosby

Finance Editor

Getting a bad home loan can cause you years of unneeded stress. That is why it is important that you secure the best home loan possible.

There are so many options available today some of which can save you thousands of dollars over the life of the mortgage. But it also means so many potential traps to work around as well. Let’s have a look at some of the things you need to consider.

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Fixed versus Veriable?

I get asked this question a lot and the answer is: ‘It depends on what your priorities are.’ I can tell you that a fixed rate is not a way to beat the market and pay less interest. That can go either way dependent upon the local and global economy. Ultimately, the best home loan is one which suits your needs.

Ultimately a fixed rate allows you to understand where your payments are for a chosen period of time. Bringing peace of mind that what you can afford today will not change due to interest rate fluctuations. Once you commit to one you need to keep it as the penalties can be very expensive.

They can be good if you have additional debt you are paying off over the short to medium term, if you have kids at home and intend to return to work in the near future or if you know your income is likely to increase. You can align the fixed rate with these events.

If you are concerned by the impact multiple interest rate rises might have on your ability to afford your repayments and maintain your lifestyle you should investigate a fixed rate.

Fixed Rate Loan

Provides stability in payment for a defined period

Rate reverts to the variable rate when the fixed rate ends, whatever that is

The facility must be kept for the fixed rate period or significant financial penalty could apply

Extra repayments are limited

For people who want peace of mind that payments won’t increase during the fixed rate period

Variable Rate Loan

Provides flexibility with extra repayments and redraw

Payments will go up and down with interest rate fluctuations

Minimal financial penalty for early repayment

For people who are not concerned by rate rises that require flexibility

Learn more about home loans

Getting the right home loan is essential to the perfect first home buying experience. Affinity Property is including some extra knowledge provided by Eleanor.

A Package versus a Basic Product

A basic product provides you with less features at a lower rate of interest. A package on the other hand will provide you with an offset account and a linked credit card and potentially some other discounts on ancillary products such as for example insurances.

Today the basic products are not always cheaper. At the moment lenders provide discounts based on the size of your loan and it is possible therefore that if your loan is large enough, you could get all of the bells and whistles for the cost of a basic product.

Offset or Only Redraw?

This one depends on how much debt you have, and how much you have or plan to have in the offset account and a little bit about your discipline.

An offset makes it easier for you to transact with these savings which may or may not be a good thing.

If you are paying a higher rate of interest for the offset facility then you need to have enough money in the account to make it worth the extra interest payment.

For Example

$249,000 mortgage means a package which includes an offset account costs 4.25% and the basic with a redraw facility costs 4.00%. The extra interest is $622.50 per year. To save that money you would need to have around $14,500 in the offset at all times to break even

Warning: This content is not designed to replace professional advice. It has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before making any decision as to whether this scheme is appropriate for you.

Talk to experts in property finance

Contact Eleanor today to receive an obligation free 30-minute consultation with an accredited finance broker at Ever After Home Loans ACL 389087.

During your initial consultation, Eleanor and her team will advise what you need to do to secure the best home loan suited to your needs. They will respond to any questions you have about finance or borrowing and help you develop a finance plan. Key things covered include:

How to prepare a successful loan application
Assess your existing loans and interest rates to see if you can do better
Identify whether you are eligible and financially ready to buy an investment property