For first home buyers, investors, those upgrading to a bigger home or looking to use the equity in your property, choosing a home loan is a major decision that can make a huge difference to what you can save.
As with any significant purchase, shopping around and comparing prices for your home loan is the best way to achieve peace of mind that you have a good deal. Unfortunately many people do not shop around when choosing a home loan. Instead, they go to their bank or other financial institution and take what they are told is the best deal for them.
Do your research
However, consumers are getting increasingly savvy and being more proactive when it comes to such matters, with more people using rate comparison services or engaging with a professional mortgage broker to help them find the right home loan. Researching the home loan market to compare and contrast current offers is an option well worth considering. In fact, in a review of more than 100 variable rate mortgages, Canstar found that on a loan of $300,000, the national average loan amount, the difference between the average and cheapest loan was $160 per month, and $1,900 per year. That’s about $48,000 over 25 years.
Ty Halse, Managing Director at Rates Direct, said: “Home loans should not be a set and forget purchase. Those home owners on a variable rate should keep a close watch on the interest rate they are paying and other deals in the market. If there is a better deal out there it’s worth contacting your lender to try and negotiate your rate, or switching loans if the savings outweigh any potential fees.”
Did you know that even a half a percent (0.50%) discount on a $450,000 mortgage could save you up to $40,000 over the typical life span of a home loan over 25 years?
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