NAB Introductory Rate Home Loan (3 years Variable)

Is a Variable Home Loan right for me? What features does the NAB Introductory Rate Home Loan have to offer? What’s better – Fixed or Variable?

So many questions! If you are thinking about buying a home for the first time, you are going to need to research your Home Loans, Compare the differences, and consult the comparison tables to really find out which Home Loan is right for you.

Step One – Determine what is more suited to your needs

Fixed or Variable? How do you decide? The best place to start is to define the difference.

A Variable interest rate is subject to change, depending on outside factors such as an underlying interest rate index, such as, the Reserve Bank of Australia. If Interest rates are set at a higher rate, a variable home loan will go up with them. However, if Interest rates are set at a lower rate, a variable Home Loan will go down with them.

Fixed term loans do not follow interest rate trends, and if a loan is established at the time of high rates, the term of the Home Loan will be fixed at this high rate, even if trends show a decline in rates overtime.

Step two – Consider the features of the Home Loan

• Freedom to Move – You can take your Home Loan with you if you move properties
• Fast cash – You can draw a minimum of $2000 when ahead of scheduled repayments
• Pay as fast as you can – You can make additional repayments to help you pay your loan sooner
• Have a holiday – Take a break from repayments when ahead
• Small savings account? – Borrow up to 95% of the value of the property
• Pay when you want – You can make repayments weekly, fortnightly or monthly

Once you have established that this is the loan for you, you will need to assess the possibilities of your financial future. For example, does the three year variable rate cater to your future? Are your family dynamics expected to change, and if so, what affect will the variable rate have on your families’ financial security?

Step Three – Consider the possibilities

Whether you’re an investment buyer, a couple without children, newly-weds or a small family thinking of expanding, you must think of how the increase or decline of interest rates will affect you and your financial security.

Consider, for a moment, that interest rates have increased, pushing your usual monthly repayment from $1280 to $1600. An average, that’s an additional $320 a month. What kind of immediate affect will this have on your expendable income?

• For an investment buyer – You might have rental tenants in your home. If your Home loan repayments increase by this amount, you cannot increase the rent to match, resulting in a loss of profit.
• For a first Home buyer – You may not have planned to need to spend this much on your Home Loan. You could find your self cutting back on your luxuries in effort to keep up with the repayments.
• For a small family – You may be thinking of expanding the family and having another child. Renovations may not be on the cards if the interest rate increase causes you to struggle with your repayments.

Of course, this is a very-worst-case scenario, and it is unlikely that this would happen to you. But, it is important to understand your finances and have a plan before you establish the loan.

Remember, Variable Rates can also do down. In this case, you might find yourself with extra spending money or investment money. So, what are you going to do if they change, either way?

Step Four – Have a Plan

Plan your way into the future. This doesn’t mean that you will be pinching pennies or counting every last drop of milk, but it does mean that you will be prepared for what the future may hold. One of the major benefits of the NAB Introductory Rate Home Loan, is that you know where you stand for at least three years. In essence, you have three years to plan for change. Just consider your options and have an idea if what you will do in a “what if” situation.

For example, you are making repayments of $1280 a month and the interest rates have declined, bringing your required monthly payment to $1200 a month. Should you bring the repayments down to match the interest rate? Or should you continue paying the same amount in effort to minimise the loan term?

When selecting a home loan always consider the possibilities, have a long term plan, and keep your goal in mind – that is, owning your home! Remember to compare and prepare, and use useful tools such as our comparison tables and many articles giving sound financial advice to those who need it.

Read the NAB Introductory Rate Home Loan (3 years Variable) terms and conditions.

• Comparison of Top 10 Credit Card Offers

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 Mortgage of the Year 2012 – this multi-award winner features 100% offset and a loyalty 0.25% rate drop after 5 years.	6.02%	6.23%	$0 / $345	95%	$150,000 / $1,000,000