With interest rates at record-low levels, it’s now possible to get a home loan with an interest rate well under 3 per cent.
Homestar Finance one of the possibilities, offering owner-occupiers a variable mortgage rate of 2.74 per cent (comparison rate 2.77 per cent), provided they have a maximum loan-to-value ratio (LVR) of 70 per cent.
It comes after Homestar passed on all 0.25 percentage points of the Reserve Bank rate cut on October 1.
Borrowers could save tens of thousands of dollars over the life of their loan by choosing Homestar rather than a big four bank (see comparison table at the bottom of the article).
Here’s how much borrowers would have to repay if they took out a 30-year home loan with Homestar:
* Calculations based on 30-year loan at 2.74 per cent
Homestar’s owner-occupied home loan includes an offset account and redraw facility, and does not charge application fees (although borrowers would need to be third-party valuation and legal documentation fees). During the course of the loan, borrowers would not have to pay monthly or annual fees.
Search for the best home loan for your situation
All things being equal, a mortgage with a lower interest rate is usually better than a mortgage with a higher interest rate.
But all things are rarely equal, and that’s why you should look at more than just interest rates when you research home loans. It's also worth considering lending criteria, fees, loan features and customer service before you settle on the right home loan for you.
Your aim should be to find not the cheapest home loan, but the best home loan for your situation.
* Data in this article was accurate as of 11 October 2019