RateCity
Good Value Rate Mortgages
Despite offering some of the best rates on the market, introductory rate home loans are not as popular as they once were, as homeowners increasingly seek out good value rate mortgages for the life of their loan.
It seems that many homeowners are wising up to deceptively-pricey introductory rate mortgages, which carry a discounted interest rate for a term, known as a ???honeymoon period???, to lure in new customers.
The special honeymoon rates generally extend from three and six months, up to three years, before reverting to a higher variable rate.
The reverted rate is often more expensive than the market average for standard variable rates.
So in the long-term, honeymoon rate mortgages may cost borrowers tens of thousands of dollars more than a good value rate mortgage from the start of the loan.
How to spot good value
To ensure you get a good value rate mortgage and save money over the life of your loan, here are a few tips to consider when home loan shopping:
Fixing all or part of your loan can ensure that you are insulated against any sudden market fluctuations.
So you are more able to ensure you have a good value rate mortgage for a set period of time than with a variable rate, which moves with the market.
Just be aware that by fixing your rate, you may also be missing out on any interest rate decreases in the event that the Reserve Bank drops the cash rate.
Taking into consideration any fees and charges, such as establishment fees, discharge fees and ongoing annual fees, can also determine whether or not your mortgage is good value.
There are hundreds of fee-free mortgages available on RateCity, so shop online to compare home loans that save you money on fees, but also have competitive interest rates for the life of the loan, so you know you???re getting the best deal.
The table below displays some of today's best value 1 Year Fixed Mortgages. Compare more fixed rate mortgages here.
It seems that many homeowners are wising up to deceptively-pricey introductory rate mortgages, which carry a discounted interest rate for a term, known as a ???honeymoon period???, to lure in new customers.
The special honeymoon rates generally extend from three and six months, up to three years, before reverting to a higher variable rate.
The reverted rate is often more expensive than the market average for standard variable rates.
So in the long-term, honeymoon rate mortgages may cost borrowers tens of thousands of dollars more than a good value rate mortgage from the start of the loan.
How to spot good value
To ensure you get a good value rate mortgage and save money over the life of your loan, here are a few tips to consider when home loan shopping:
- Consider fixing all of part of your home loan
- Take fees and charges into account
- Compare mortgages online
- Don???t be swayed by bank???s advertising campaigns
- Don???t be afraid to switch down the track
Fixing all or part of your loan can ensure that you are insulated against any sudden market fluctuations.
So you are more able to ensure you have a good value rate mortgage for a set period of time than with a variable rate, which moves with the market.
Just be aware that by fixing your rate, you may also be missing out on any interest rate decreases in the event that the Reserve Bank drops the cash rate.
Taking into consideration any fees and charges, such as establishment fees, discharge fees and ongoing annual fees, can also determine whether or not your mortgage is good value.
There are hundreds of fee-free mortgages available on RateCity, so shop online to compare home loans that save you money on fees, but also have competitive interest rates for the life of the loan, so you know you???re getting the best deal.
The table below displays some of today's best value 1 Year Fixed Mortgages. Compare more fixed rate mortgages here.
