What's the difference between Real Time Ratings and comparison rates?
A comparison rate calculates the cost of a $150,000 loan over 25 years. While a comparison rate is a good industry benchmark, it doesn’t consider your specific lending requirements.
Real Time RatingsTM factors in essential information like your loan size, your loan-to-value ratio (LVR), whether you want an offset account and whether you are an investor or an owner-occupier.
An ‘interest-only’ loan is a loan where the borrower is only required to pay back the interest on the loan. Typically, banks will only let lenders do this for a fixed period of time – often five years – however some lenders will be happy to extend this.
Interest-only loans are popular with investors who aren’t keen on putting a lot of capital into their investment property. It is also a handy feature for people who need to reduce their mortgage repayments for a short period of time while they are travelling overseas, or taking time off to look after a new family member, for example.
While moving on to interest-only will make your monthly repayments cheaper, ultimately, you will end up paying your bank thousands of dollars extra in interest to make up for the time where you weren’t paying off the principal.
Real Time RatingsTM uses a range of information to provide personalised results:
- Your loan amount
- Your borrowing status (whether you are an owner-occupier or an investor)
- Your loan-to-value ratio (LVR)
- Your personal preferences (such as whether you want an offset account or to be able to make extra repayments)
- Product information (such as a loan’s interest rate, fees and LVR requirements)
- Market changes (such as when new loans come on to the market)
No, the rating you see depends on a number of factors and can change as you tell us more about your loan profile and preferences. The reasons you may see a different rating:
- Lenders have made changes. Our ratings show the relative competitiveness of all the products listed at a given time. As the listing change, so do the ratings.
- You have updated you profile. If you increase your loan amount, the impact of different rates and fees will change which loans are the lowest cost for you.
- You adjust your preferences. The more you search for flexible loan features, the more importance we assign to the Flexibility Score. You can also adjust your Flexibility Weighting yourself, which will recalculate the ratings with preference given to more flexible loans.
No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Rate Guarantee.
However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.
Work out your mortgage repayments using a home loan calculator that takes into account your deposit size, property value and interest rate. This is divided by the loan term you choose (for example, there are 360 months in a 30-year mortgage) to determine the monthly repayments over this time frame.
Over the course of your loan, your monthly repayment amount will be affected by changes to your interest rate, plus any circumstances where you opt to pay interest-only for a period of time, instead of principal and interest.
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