Finding the right home loan doesn’t have to be daunting. At NBS Home Loans, we take the guesswork out of finding a loan by comparing a range of products from over 40 lenders to find the one that’s right for you. Here are some of the things we look at:
- Interest Rate
For most people, a low interest rate is one of the key factors in choosing a home loan. Over an standard 30-year loan term, even small differences in interest rates can add up to big savings. For example, on a $500,000 loan, just a 0.5% pa difference can save you almost $50,000 in interest over the life of the loan. Paying your loan off as fast as possible can also save you a huge amount of interest in the long run.
- Fees and Charges
Along with interest rates, a number of fees and charges can also contribute to the total cost of your loan. These include monthly or annual fees, establishment fees, valuation fees, exit or break costs, redraw fees, and Lenders Mortgage Insurance (which is generally charged by lenders if you are borrowing more than 80% of the value of a property). We will work with you to find a cost-effective loan and will help you understand the impact of any fees and charges on the overall cost of your loan.
- Fixed or Variable Rate?
If you choose a variable rate loan, your interest rate may go up or down at any time in line with changes in the economy and lending market. Variable rate loans usually offer the greatest amount of flexibility when it comes to making extra repayments or switching loans, however you’ll need to be prepared for your repayments to increase if the interest rate goes up.
On the other hand, the interest on a fixed rate loan will remain the same for a set period of time (usually 1-5 years). On the plus side, this can be easier for budgeting purposes as your repayments will stay the same. In addition, many fixed rate loans are currently offering a lower interest rate than standard variable rate loans, so you may end up paying less interest initially. However, there are generally restrictions on making extra loan repayments or switching your loan during the fixed rate period, and you’ll miss out on any benefit if interest rates go down.
It is also possible to fix only part of your loan while keeping the rest on a variable rate. We can talk you through your options and help you find the right loan structure for your needs.
With so many loans to choose from, it can be hard to know whether to choose a basic, ‘no-frills’ product or one with all the bells and whistles. Extra features such as an offset account and redraw facility often come at an additional cost, but can also be beneficial in the long run if used to your advantage. We will take the time to understand what is important to you and to help identify which features might best suit your goals.
- Choice of Lender
Different lenders define income in many different ways. For example, one lender may allow share dividends as income, while another lender may not. Likewise, factors such as your credit history, financial records, the length of time you have been working in your current job and the amount you wish to borrow can all influence which options are available. We have a thorough understanding of each lender’s policies and will take the time to understand your circumstances to find the most appropriate match for you.