Mortgage rates vary dramatically between lenders and even within a lender’s suite of products, so it’s important to shop around before you make your final decision.
Many borrowers look to the big four banks for their mortgages, and as a result they hold about three quarters of the mortgage market in Australia.
Unsuspecting borrowers are often lured in to the major banks by clever advertising campaigns, thinking that they are getting the best deal on the market. However, the advertised home loan rate they enquire about may not even be among the 150 cheapest loans monitored by RateCity.
So it pays to shop around for a good mortgage rate before you purchase a property, and equally important to monitor the market after you buy.
By shopping around for a good deal on your mortgage rate you might save yourself thousands of dollars over the life of the loan.
For instance, if you are considering a mortgage rate of 7.22 percent for a $300,000 loan over 25 years and you shopped around to find a better rate of 6.79 percent then you might save more than $80 each month in repayments. Over 25 years that is a whopping saving of $24,000, and evidence that shopping your mortgage rate has is benefits.
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Monthly repayments are based on advertised rate, loan amount and selected payment frequency over 25 years.
The comparison rate is based on secured credit of $150,000 and a term of 25 years. WARNING: The comparison rate applies only to the example given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan.
Consider whether this general financial advice is right for your personal circumstances. You may need financial advice from a qualified adviser. Read our detailed disclosure here.
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