Home Loan Facts Sheet
The federal government put valuable information in the hands of homebuyers on January 1, 2012, when it rolled out home loan "Key Facts Sheet" legislation. Canberra's banking reform legislation now makes it compulsory for institutions to provide a home loan facts sheet, on request.
The home loan facts sheets aim to make it easier for borrowers to compare apples with apples before they apply for a home loan.
The facts sheets are standardised so lenders are required to provide borrowers with information in the same way, making it easier to compare home loans. It helps first home buyers in particular to compare loans side by side and give them just a little more bargaining power.
Important information is highlighted within home loan facts sheets including the headline and comparison interest rates, fees and charges, the total financial cost over the life of the mortgage and information about the impact of rate changes. While a home loans facts sheet isn't an offer for credit, the potential borrower will still need to apply for the loan and meet any lending criteria.
Borrowers will typically be better off by comparing a few different loan offers and using these facts sheets, plus financial comparison websites such as RateCity, will give more borrowers the chance to get the right loan and shave a bit more off their costs.
By comparing home loans, borrowers could potentially save tens of thousands of dollars of the life of the loan if they compare products and get one that best suits their needs. For instance, moving from a rate of 7.30 percent to a rate of 6.35 percent, a borrower with a $400,000 home loan could potentially save around $240 in monthly repayments and more than $72,000 over 25 years.
In addition to using home loan facts sheets and comparison websites, borrowers should always refer to the product disclosure statement before taking up any financial product and RateCity recommends using the "comparison rate", which includes ongoing fees and charges factored into the rate.
For further clarity about the cost of taking out a home loan, including repayment costs and total interest costs, try using a home loans calculator such as the mortgage calculator on RateCity, or visit our home loans guide for more information about borrowing today.