Interest Rates

Find out about Comparison Rates and the different types of Interests

Interest Rates are the ongoing fee that Lenders charge throughout the life of the loan. Many future borrowers & home buyers are familiar with interest rates and keeping an eye on the fluctuation as they play an important part of your home loan repayments.

There are two types of interest rates depending on your preference or the property’s intended purpose - called Fixed and Variable Rates.

  • Variable Rates: are interest rates that fluctuate with the home loan market. These are the types of rates that many home buyers keep up to date with throughout the year.

    If a Variable Rate is applied to your Home Loan, this will change your repayments throughout the life of your loan based on how the market fluctuates.

    It is wise to keep an eye on the interest charged on your Mortgage as Variable Rates can go up and down - increasing or decreasing your repayments.

  • Fixed Rates: are interest rates that stay the same over a designated period of time, if the proposed lender offers this as an option to you. It is more common for Home Buyers purchasing an Investment Property to apply a Fixed Rate.

    Fixed Rates will be slightly higher than the Standard Variable Rate because the borrower is avoiding fluctuation and can only be placed for a specific amount of time - agreed upon by the lender and the borrower.

    The time frame for Fixed Rates is 1 to 5 years and once the agreed period has come to a close, you are welcome to re-apply.

  • The interest rate applied to your Home Loan can be affected by your personal situation. The Lenders will take into consideration your Loan to Value Ratio when applying Interest Rates as a lower LVR can give you a much better chance at negotiating a lower rate.

    The best way to compare Interest Rates offered through different Lenders is to use the Comparison Rate.

    All Lenders are obligated to display a Comparison Rate to provide a more reliable system for Borrowers to Compare Rates.

    The Comparison Rate takes most of the fees into consideration , however not all the fees included. It is the most near accurate and reliable source to compare the true cost of the Home Loan between different Lenders.

    Comparison Rates are a great tool that Borrowers can use however also keep in mind Home Loan Features that are important to you - thus not focusing only on the Interest Rates provided.

    There could be Lenders offering Offset Accounts or Redraw Facilities that are important for you to take into consideration. Also keep in mind that some Lenders will offer Lower Interest Rates, but could have Higher Fees.