Choosing a Home Loan
If you are considering buying a house and applying for a home loan then you should not take this decision lightly. Your home loan will be something that you will be paying off for a long time and if you make the wrong decision then you may end up paying a lot more money than you need to. Choosing the right home loan is all about knowing what to look for in a home loan and how people find the right home loans for them.
What you should Consider
Before you apply for a home loan you should consider a few simple questions that will help you narrow down the loan that you are looking for. These questions are:
- Long term needs. When you are choosing a home loan, consider if the home loan will meet your long term needs. Home loans and your personal circumstances will change over time so be sure that all the options are thought about.
- How will the loan suit if you have less money. If you take a pay cut or lose your job how will you be able to pay off the loan? By getting a loan with lower monthly repayments you may be able to avoid situations where you can’t make the repayments.
- Are there going to be more expenses in the future. Will you have other expenses in the future? If you plan on having another child or something similar be sure that you budget for the increase in costs.
What to Look for in a Home Loan
When you are choosing a home loan you should be sure to know what to look for in a home loan. You should be looking for:
- Ability to make additional repayments. All home loans should allow you to make additional repayments if you would like. Avoid home loans that don’t allow you to or charge you to do so.
- Offset facility. If you have savings then you may benefit from a loan with an offset account. The offset account will reduce the amount of interest that you will pay.
- Redraw. If you make additional repayments then you may want access to the funds at a later date. Be sure that your home loan has a redraw facility.
- Fees. When you are looking for a home loan be sure that the loan doesn’t have a lot of fees. The fees can often be hidden and you may not know what you are paying until your first repayment is due.
What Loans are Available
The ANZ has a variety of home loans available. The basic groups of home loans that are available are:
- Variable. The variable rate loans are the most common loans. The variable rate loans offered by the ANZ will have a low interest rate and features that will help you save money and give you flexibility.
- Basic Variable. The basic variable home loan will be much like the variable loan however, they will often come with fewer features but the lowest interest rate offered by the ANZ.
- Fixed. Fixed rate loans are home loans where the interest rate will not change. The fixed rate loans will generally have a slightly higher interest rate and less flexibility.
- Split. Split loans will be a combination of the above loans. Many people will use their ANZ split loan to get a loan where half the funds are subject to a fixed rate and the other half is subject to a variable rate.
Choosing the right home loan is a very important part of getting a home. It can save you a lot of money and allow you to borrow that bit more so you will be able to get the house of your dreams.
Related posts:
- Choosing an Investment Loan
- ANZ Three Year Fixed Rate Home Loan
- Basic Variable Home Loans
- IMB Standard Variable Home Loan
- Best Home Loan Rates
- AMP Bank Basic Variable Rate Loan
- Fixed Versus Variable Rate – Which one to Choose?
- Basic Variable Loans
- IMB Fixed Rate Home Loan
- eChoice Basic Home Loans
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 5.85% | 6.21% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 Bankwest Online Home Loan | A low interest rate home loan with a $0 application fee and ongoing maintenance fees. This offer is exclusively available by applying online. | 5.97% | 5.97% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan | Awarded the 2011 Non bank Lender of the Year this feature-packed loan rewards customers with a bonus rate drop of 0.25% after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
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