RESIDENTIAL HOME LOANS
At Finance Brokers of Tasmania we make it easy to get into your own home. Whether it’s your first home, an upgrade, downsize or an addition to your investment portfolio – we’ll find the right loan for you. Over the last 32 years we have helped thousands of Tasmanian’s with their home financing needs. At Finance Brokers of Tasmania you won’t just be another number, you’ll be a client for life.
With so many lenders to choose from and so many different types of loans, how do you know which loan is right for you? That’s where we come in! Our experienced home loan consultants will compare the best loans on the market and tailor a personalised finance solution for you. We take the hassle out of home finance and ensure you not only get a great deal but have a great home buying experience.
If you are interested in finding out some approximate repayment amounts we have some great calculators available – just follow the below links:
Get started today and book a free appointment with our home loan brokers now.
HOME LOAN INTEREST RATES
There are so many things to look out for when arranging finance for your next home it can sometimes be daunting choosing where to start. Whilst your home loan interest rate isn’t the only consideration when choosing a loan, it is a great place to start.
VARIABLE INTEREST RATES
Variable interest rates move up and down in response to movements in the cash rate and at times due to other changes by your finance provider. As with any loan feature there are advantages and disadvantages with a variable rate.
The major advantage of a variable rate is that they usually go down if the cash rate reduces, in turn reducing the amount you have to pay. This isn’t always the case however and sometimes lenders decide to not pass on the rate reduction to their customers. Another advantage of a variable rate home loan is the ability to make extra repayments without being penalised.
There are two sides to every coin and variable rates will usually rise if the cash rate is increased, increasing your repayments and the amount of interest you pay. The rate may also increase even if the cash rate doesn’t.
FIXED INTEREST RATES
A fixed interest rate allows you to ‘lock in’ an interest rate for a set period of time, usually 12 months to 5 years. Doing so can protect you against future increases to interest rates and can allow you better financial control as you know exactly what your repayments will be each month during the fixed period.
Unfortunately, the opposite also applies and you wont benefit from falling interest rates. Some fixed rate home loans also have restrictions on extra repayments with some not allowing it at all and some enforcing per annum limits. Some credit providers may charge a fee for ending a fixed rate period before the agreed upon time is up, particularly if interest rates are lower than when you took the loan out.
A split loan allows you to fix a portion of your loan whilst the utilising a variable rate for the remainder. For example, you may have a $500,000 loan where you pay a fixed rate on $300,000 and a variable rate on $200,000. This may work for you if you want the security of consistent payments on a portion of your loan but want to capitalise on interest rate drops and the increased flexibility of a variable rate loan.
A comparison rate is a rate that helps you determine the real cost of a loan. It combines the annual interest rate with all the fees and charges that relate to the loan. The comparison rate is the best way to compare loans from different providers to determine exactly what it will cost you. This being said, comparison rates are not the only thing to consider when you are deciding which loan is best for you. It also pays to consider what features the loan offers and how important these are to you. Some examples of key features o consider are offset accounts, redraw facilities and the ability to pay more than the minimum payment.
HOME LOAN COSTS
It always pays to check the costs when comparing home loans so you know exactly how much the loan is going to cost you. Credit providers must provide you with information about all charges before you sign the contract. Different lenders will have different costs and the same charge may just have a different name. At Finance Brokers of Tasmania we review all the best loans and compare the total cost for you. Below are some of the costs we take into account when helping you find the best available deal.
Establishment Costs: also called application, up-front, start-up or set-up costs. One off payment at the start of your loan.
Ongoing Costs: also called service or admin costs. Charged monthly or annually for administering your loan.
Lenders Mortgage Insurance (LMI): Not exactly a fee but a type of insurance that financiers take out to cover themselves against borrowers defaulting on their loan repayments. Typically only payable if your loan to value ratio (LTV) is over 80%.
Fixed Rate Break Costs: may be charged if you break your fixed rate mortgage. Typically payable if interest rates have gone down since the establishment of your loan.
Early Exit Costs: also called early termination, deferred establishment, deferred application or early discharge costs. You may attract these fees if you pay your loan out in full within a certain time period. The fees can only be charged on loans written before July 2011 as exit fees are now banned on new loans. If the fee is charged it must be limited to recovery of a the providers loss.
HOME LOAN FEATURES
As we have discussed, your home loan interest rate isn’t the only thing to consider when you begin your home loan search. There are many features that can not only make your life easier but that can also save you money. The main features to look out for are:
Extra Repayments: The ability to pay more than the minimum repayment without being penalised.
Redraw Facility: A redraw facility allows you to withdraw from the equity you have built by paying your loan down.
Offset Account: A bank account that is linked to your home loan facility which is ‘offset’ against the home loan principal, in turn reducing the interest payable.
Interest Only Loan: Your payments only pay off the interest and not the principal. This will keep your repayments lower but will not reduce the principal amount owing.
Repayment Holiday: A period where you can take a break from your home loan repayments. Can be helpful if things get tight or if something unforeseen occurs.
Portability: You can change houses without the need to change loan facilities.
Line of Credit: A line of credit works just like an overdraft account as a revolving loan facility that once setup can accessed whenever you want – either in full or stage by stage.