Compare fixed rate bad credit home loans

Find home loans from a wide range of Australian lenders that best suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more. - Last updated on 19 Nov 2019

Compare fixed rate bad credit home loans

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Fixed rate bad credit home loans

If you have a poor credit history you will already know that it can be very challenging to access funds from banks and other financial institutions that lend money. Unsurprisingly most lenders are wary of taking an extra risk by lending to someone who has a history of defaulting on loans or similar financial transgressions. Fixed rate bad credit home loans are designed specifically to help people who have a poor credit rating. They aim to assist you to budget more easily so you can finance purchases to refurbish or to build your own home.

Why opt for fixed rate bad credit home loans?

Fixed rate bad credit home loans have a fixed interest rate for a certain period. Sometimes these home loans have a higher rate of interest and higher annual fees than other loans due to the increased risk of lending to someone with a poor credit record. Mainstream lenders are often unwilling to lend to those with a bad credit history and in this case, you may need to turn to specialist lenders who have a more flexible approach. Lenders selling bad credit home loans offer mortgages to people who are a known credit risk.

What are the main choices for fixed rate bad credit home loans?

Besides higher fees and interest rates, you may find that the amount you can borrow is restricted by the lender, often based on the ratio of the loan amount requested to the value of your property. You are likely to need to:

  • Supply evidence of regular income as proof that you can manage your funds
  • Declare all your outstanding debts
  • Pay stamp duty and all processing fees
  • Raise a deposit equivalent to at least 20 per cent of the loan value.

 

What are the significant loan features?

Even with a less than perfect credit history you should still look for favourable loan terms including affordable repayments. Check that the frequency of repayments suits how you organise your finances and whether you will have access to an offset account or a redraw facility.

Although higher fees are to be expected you should still shop around and compare fees on a number of different bad credit home loans until you decide which is the most competitive. If possible seek out an understanding lender to help you get the best possible fixed rate and save money.

What are the rewards and risks?

The downside of the bad credit home loan is the higher fees and interest rates you will be charged. This can include higher exit fees should you wish to pay the loan off before the term ends.

The upside is the increased flexibility applied to the criteria for lending, your protection from fluctuating interest rates and your improved ability to plan your budget. In the longer term, as long as you stick to the loan agreement and make your repayments in full and on time, your credit rating will definitely benefit.

 


Mark Bristow is a senior financial writer for RateCity. Working for over ten years, Mark previously wrote and researched commercial real estate at CoreLogic, consumer technology at Appliances Online, and most recently, personal finance for RateCity. Whatever the topic, Mark’s goal is always to provide simple solutions to complex problems.


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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