Your mortgage rate is probably your biggest monthly expense. Whether you are already a homeowner or are thinking about buying property in Australia for the first time, it’s worth taking the time to research your mortgage options. Consumers can borrow from large banks, small banks, or private lenders, all of which will offer different fees, features, and rates. Just as you would shop around to find Sydney real estate, it’s a good idea to shop around to find the best mortgage lender. Overall, Australia’s mortgage rates are relatively low, making it a good time to jump into the market and invest or try to refinance.
Look for Online Deals
Some of the best Australian low-interest mortgage rates can be found online. Online lenders spend less on advertising and the cost of running a brick and mortar operation. They are then able to pass these savings down to their customers. State Custodians is a small mortgage company that operates online, with their Standard Variable Offset Loan winning an award from Your Loan Magazine. This loan offers an interest rate of 6.09%, making it ideal for first-time home buyers. Other online loans with notably low interest rates include the MyRate Advantage Loan at 6.15%, and the Ratebusters Ultimate Loan at 6.04%.
Securing a mortgage online can be ideal for investors or those looking to refinance, but many home buyers prefer to speak to someone in person. The key to dealing with bigger banks is to shop around and arrange meetings with several representatives. You can certainly find a good deal at a large bank. National Australia Bank has been recognized for its competitive rates, offering a three-year fixed loan at 6.79% and a standard variable loan at 6.5%. Smaller credit unions can also offer competitive rates, so it’s worth looking at them in addition to the major name lenders
When you’re comparing deals at different banks, think not only about the interest rates but also the terms and conditions of each mortgage loan. Find out whether you can split your loans into part variable and part fixed rates, and if you can consolidate multiple debts for a lower overall interest rate. Investors may be in search of interest only loans, while residential owners may need fast cash to close on a deal.
Bank fees can range from hundreds to even thousands of dollars. If you find one lender that offers you a great deal on interest rates but makes up for it with high fees, you might be able to talk them down. Consumers with excellent credit will have better bargaining power, as will those negotiating a mortgage with their existing bank. If you’re on the fence between two lenders, try asking about the possibility of waiving fees. Some banks will also lower fees and interest rates when you agree to set up automatic payments.
If you already have a home loan with one bank, ask about the possibility of special offers for switching to another bank. Citibank and National Australia Bank both offered $1,000 in cash for switching accounts last year. It’s important to remember that banks want your home loan business, as competition for customers is fierce and home lending involves far less risk than business lending. Discounts are available for those who take the time to research options and
ask about special offers.