Have you ever wondered what all the fuss is about when it comes to loan comparisons? Most mortgage brokers offer these types of services as a complementary feature to their interest rate comparisons, but what is it about a quick loan comparison that seems to make the option so appealing to first time buyers?
Well you might not know this, but although all banks are governed by the Reserve Bank of Australia, they are still in charge of their own policies and procedures.
What this means is that if the RBoA suggests their own interest rates of 2%, then it will be up to a bank to decide on the rate percentages that they propose to their clients. Some will go out of their way to keep their costs as low as possible; after all a lower rate can spell the difference between a new borrower and a lost opportunity.
But too low and it will take years to accumulate any type of profit worth shouting about. And this is where home loan comparisons come in handy. They work by getting to grips with the different offers available from varying banks and then honing in on those that could be the most beneficial in the long run.
Isn’t that just an interest rate comparison?
No, not at all. In fact a comparison on a home loan has almost nothing to do with rates of interest. Sure, the rates will be considered, but there are so many other factors that need to be considered for a good deal to become a great one. For example, did you know that fixed rates are typically only available for a specific amount of time?
If one bank offers a fixed interest rate for 2 years before reverting to a variable rate of 3.99%, but the other offers a fixed option for 1 year, with a variable rate at 3.29% once that solution comes to an end – which would be the better choice? It will be down to your reliable mortgage broker to hone in on the better option and this is why so many first time home buyers, as well as repeat borrowers, consider hiring their services to carry out these exact features.
You might not save a huge amount a month, but just imagine what you could save over the duration of your mortgage. We’re talking thousands of dollars – all by investing a little time and cash into a broker to find the best solution for your needs.