Some of the best owner occupier home loans in September 2020

Some of the best owner occupier home loans in September 2020

The Australian Bureau of Statistics (ABS) recently found that Australian property prices fell in every capital city except Canberra over the June 2020 quarter. The number of residential property transactions also fell during this time, due to the effects of COVID-19 on property markets.

Even if your home-buying plans have changed, falling prices could make it easier for some first home buyers to take the next step towards becoming home owners. Current owner occupiers may also be able to take advantage of interest rates being recently slashed to new record lows to refinance their home loans.

Here are some of the top rated home loan deals for owner occupiers in September 2020, based on their Real Time Ratings™. Check the RateCity Leaderboards for more information.

(Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.)

Best variable interest rates for owner occupiers

Large and small mortgage lenders have continued to slash variable interest rates in recent weeks, with Reduce Home Loans setting a new record low of just 1.89 per cent (comparison rate 1.92 per cent). Of course, it’s important to remember that you’ll need to hold equity or a deposit of 40 per cent to qualify for this loan, which has a maximum amount of $850,000.

Other variable rate home loan options may not have rates quite this low, but they may have terms, conditions, features and benefits that better suit your own personal financial situation.

Best fixed interest rates for owner occupiers

With rates on the low side, it’s little wonder that many owner occupiers are looking to lock in a fixed rate at this time. Demand for fixed rates has been increasing, according to a recent RateCity survey and responses from bank spokespeople.  

As well as locking in a lower interest rate, fixed rate borrowers may also be able to benefit from special offers, such as cashback deals on the following five-year fixed rate home loans:

Best interest rates for owner occupier from the large banks

If you’re looking at refinancing your home loan, it could be worth considering all of your available options, including the major banks. A recent report found that in New South Wales, more than two thirds of refinancing activity was dominated by the big four banks in August 2020.

Major banks may be in a position to not only offer an affordable home loan rate, but also cashback deals and other introductory offers, which may appeal to certain owner occupiers. 

Remember to always compare different home loan options and consider contacting a mortgage broker or financial counsellor for advice before making any final decisions, as the home loan with the lowest interest rate may not be the mortgage that best suits your personal financial needs.

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Learn more about home loans

What happens to your mortgage when you die?

There is no hard and fast answer to what will happen to your mortgage when you die as it is largely dependent on what you have set out in your mortgage agreement, your will (if you have one), other assets you may have and if you have insurance. If you have co-signed the mortgage with another person that person will become responsible for the remaining debt when you die.

If the mortgage is in your name only the house will be sold by the bank to cover the remaining debt and your nominated air will receive the remaining sum if there is a difference. If there is a turn in the market and the sale of your house won’t cover the remaining debt the case may go to court and the difference may have to be covered by the sale of other assets.  

If you have a life insurance policy your family may be able to use some of the lump sum payment from this to pay down the remaining mortgage debt. Alternatively, your lender may provide some form of mortgage protection that could assist your family in making repayments following your passing.

Mortgage Calculator, Loan Results

These are the loans that may be suitable, based on your pre-selected criteria. 

Interest Rate

Your current home loan interest rate. To accurately calculate how much you could save, an accurate interest figure is required. If you are not certain, check your bank statement or log into your mortgage account.

How will Real Time Ratings help me find a new home loan?

The home loan market is complex. With almost 4,000 different loans on offer, it’s becoming increasingly difficult to work out which loans work for you.

That’s where Real Time RatingsTM can help. Our system automatically filters out loans that don’t fit your requirements and ranks the remaining loans based on your individual loan requirements and preferences.

Best of all, the ratings are calculated in real time so you know you’re getting the most current information.

What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.

How much are repayments on a $250K mortgage?

The exact repayment amount for a $250,000 mortgage will be determined by several factors including your deposit size, interest rate and the type of loan. It is best to use a mortgage calculator to determine your actual repayment size.

For example, the monthly repayments on a $250,000 loan with a 5 per cent interest rate over 30 years will be $1342. For a loan of $300,000 on the same rate and loan term, the monthly repayments will be $1610 and for a $500,000 loan, the monthly repayments will be $2684.

What is a construction loan?

A construction loan is loan taken out for the purpose of building or substantially renovating a residential property. Under this type of loan, the funds are released in stages when certain milestones in the construction process are reached. Once the building is complete, the loan will revert to a standard principal and interest mortgage.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

What is a specialist lender?

Specialist lenders, also known as non-conforming lenders, are lenders that offer mortgages to ‘non-vanilla’ borrowers who struggle to get finance at mainstream banks.

That includes people with bad credit, as well as borrowers who are self-employed, in casual employment or are new to Australia.

Specialist lenders take a much more flexible approach to assessing mortgage applications than mainstream banks.

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

What is a valuation and valuation fee?

A valuation is an assessment of what your home is worth, calculated by a professional valuer. A valuation report is typically required whenever a property is bought, sold or refinanced. The valuation fee is paid to cover the cost of preparing a valuation report.

Why should you trust Real Time Ratings?

Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

If you have any feedback about Real Time Ratings™, please get in touch.