May 14, 2014
The current competitive home loan market means a number of local lenders have reduced their variable home loan interest rates, which is great news for home buyers.
However, it’s vital you investigate any mortgage deal thoroughly before signing on the dotted line.
According to finder.com.au, seven lenders have dropped variable interest rates on 20 home loans by as much as 0.17 % since January, including Bank of Queensland, Citibank, Home loans, HSBC and Westpac.
Even if a lender’s discount looks great make sure you shop around and compare rates before you jump on their bandwagon. You might find you’d save you tens of thousands of dollars over the life of your loan with another provider. That’s money better in your pocket than in interest payments.
What to look out for:
- Check the fine print. Discounted rates don’t always last. Check you won’t be penalised down the track.
- Remember loyalty isn’t always repaid. Just because you’ve been a loyal customer for years doesn’t mean your lender will give you the best rate on the market. Do your homework first and, if you’re committed to staying with your lender, negotiate a deal based on the best offer you can get.
- Swings and roundabouts. Lenders, including the major banks, often market their home loan deals with a reduced standard variable rate. But make sure you’re not being penalised elsewhere in the contract and paying more in the long run.
Don’t be blinded by bright and shiny special offers. Ask me to walk you through the pros and cons of the deal first – I can make the homework easier and perhaps steer you in the direction of a better deal for the long term.