Currently (2012), the best variable home loans are in the range of 6.3%-7.4%. The popular 3 year fixed home loans rates in Australia vary between 7.09%-7.4%.
The lowest home loan rates in Australia are not always the best option. There are fees, bank charges and conditions, which all form the home loan pack.
There are numerous home loan brokers who suppose to help you choose the right lender.
However, they often let you decide what is best for you. Although, the mortgage brokers are not necessarily hopeless their service may sometimes be inefficient. After 3 or 5 years of repayments you are going to be redirected into the variable loan anyway. Thus, it is the financial security of your lender, which provides the right picture for your home loan.
Currently, the smaller lenders beat the big brothers on the variable interest rate.
Reduce Home Loan offers 6.29% while Once and State Custodians provide 6.39%
However, the most popular variable home loans belong to Bankwest (6.7%), CUA (6.87%) and MeBank (6.99%).
As for the fixed 3 year home loans the picture is different. Heritage and Aussie offer 6.99% on their fixed 3 year home loan. ING and HomeSide are just above the 7.1% mark.
The popular fixed 3 year home loans belong to big guns: NAB (7.29%), ANZ (7.35%) and Bankwest (7.38%). Other banks are just above 7.4% mark. Hmmm, so what is going on? Well, although the smaller lenders offer better deals, the bigger ones offer stability and the security. If you intend to pay off your mortgage within 10 years then home loan rate comparison is a good measure to choose the lender. However, for longer periods of repayments your home loan must incorporate:
This feature has been extensively advertised in media. A lot of lenders offer 100% home loan no deposit with a moderate security.
However, it is the price of the house versus borrowers income which will determine the eligibility to obtain the loan.
If you require 150K for the house then the moderate income ($40K per annum) should secure the loan.
However, banks will not grant 'home loan no deposit' or any loan which repayments will cross 45% of the income. Therefore, it is important to speak to a broker or a bank mortgage specialist to discuss the issue.
Home loan deals in Australia should not be limited to current interest rates and the fees only. Flexibility of repayments and redraw-offset accounts are paramount to have a cost-effective loan for years to come.
You must press the lender to offer offset account, which will reduce the interest with every additional deposit. The offset account must have a redraw facility, so you can use the money when needed.
It is important that the offset account is linked to your EFTPOS. This way, the sudden shortage of funds can be supplemented with the offset's surplus. Shop around if in doubt!