How to get the best deal on your home loan
Your budget is ready, your deposit is sitting in your bank account - you’re ready to buy! The next step: deciding who to borrow the money from.
Each institution has its strengths, each one will give you plenty of reasons why you should lend through them. Your home loan is a big commitment - these are the people who are going to help you achieve home ownership!
Here are some things to look for when comparing deals.
This is an obvious one, we know. But it’s not necessarily black and white. Should you fix the rate, or take the variable option?
In today’s market, a fixed rate is a very safe way to go. Interest rates are currently low and there is speculation they will be increased (very slightly) within the year. So this does appear to be a secure way to borrow.
On the other hand, the flexibility offered through a variable loan is great for people who are unsure where they will be in 12 months or so. Commiting to a fixed term locks you in, whereas the variable loan allows more freedom.
We like to talk our members through all the options, and come up with the best solution to fit your goals. That’s why we give you the opportunity to register your interest in a loan online, let us call you, and work it out from there. It’s all about reducing your hassles, and increasing your flexibility.
A low interest rate is not the only feature to consider when deciding on a loan. Someone offering the lowest rate may have more added fees, or other hidden nasties.
Some institutions offer features to their loans, to balance out the competition. For example an interest offset account is a great feature for those who have savings, as it rewards your hard work! The balance of your bank account is applied against your loan balance to reduce the interest payable.
Another important feature is the flexibility to make additional repayments to your mortgage, rather than just meeting the minimum. And furthermore - a redraw facility, which allows you to withdraw that cash for your own use later, should you need the money for one reason or another. Basically, this means your mortgage can act as a savings account.
Ah, these will get you if you’re not paying attention! That’s why it’s great to do the research and find out what you’re looking at. Some of the particularly prevalent ones are establishment fees, ongoing fees, early exit fees and fees for breaking a fixed rate. An institution that offers a very low interest rate may charge higher fees, so take the time to compare these when you’re assessing your deals.
Do you live somewhere more remote? Some banks don’t have branches in regional areas, meaning if you have any issues or questions it must be done online or over the phone. This can be frustrating! It is worth sussing out which institutions have branches near you, or if they offer a mobile service where one of their team can visit you, to ensure you’ve got someone you can chat with face to face.
Want to know more about our Home Loans? Find out about our lending services, or read more about the information you need to apply for a loan.
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CWCU has fantastic home loan options to suit your needs