Choosing the right Home Loan
Getting the right mortgage can take time, but has the potential to save you thousands of dollars in repayments, fees and interest over the life of your loan.
Before you start comparing home loans, work out what features are most important to you.
- Do you need mortgage that gives you the flexibility to switch products down the track?
- Do you want to make lower repayments at the start of your loan, or pay it off as soon as possible?
- Do you want to be able to access the equity in your home?
In addition to fees and interest rates, look out for features including:
Mortgage Offset Account
Allow your everyday savings to help reduce the balance on your mortgage, so you pay less interest and potentially save thousands over the life of your loan.
Withdraw additional repayments at any time from selected ATMs, EFTPOS, online banking or by phone.
Benefit from the flexibility of choosing weekly, fortnightly or monthly repayments (interest-only repayments are usually monthly).
Make unlimited additional repayments, save money in interest and pay off your home loan sooner.
Suspend repayments for nominated periods from three to 12 months, if enough additional repayments have been made.
Although there are many different home loans available, they are each made up of two components: interest and principal.
An interest only home loan means your repayments only cover the interest for a set period of time—they won’t reduce the balance on your mortgage.
This type of repayment option is ideal if you’re looking to reduce your loan commitments at the beginning of your loan period. It gives you the flexibility to pay off other debts or take advantage of wealth-building opportunities.
Principal and interest
This repayment option involves paying off a portion of both the principal (the amount borrowed) and interest over an agreed period of time, up to 30 years. This repayment option lets you reduce your home loan balance when you make repayments.
Home loan rates and fees
When choosing a home loan, you should take into account any upfront and ongoing costs associated with the loan, including loan service, loan establishment, account keeping, redraw and early termination fees and charges.