These days in the world of advertising everything is designed to grab your attention as quickly as possible so that you remember their product above everyone else’s. As such it’s important to point out that picking the best home loan is not all about mortgage interest rate.
“It comes down to what is important to you and what suits your needs.”
In the world of finance, the path the lenders have gone down is to advertise their Interest Rate or their ‘Headline’ rate. And by law, they advertise their Comparison rate next to it or underneath it. This is all well and good as it pays to have as lower rate as possible (why wouldn’t you want to pay less interest). But if you are unable to perform certain functionalities that are important to the way you want to conduct yourself, is the lower rate product the best for you?
Is Internet Banking important for you?
99% of lenders these days will have some sort of on-line platform that you can access to view your accounts, but there is a significant variation on what you can do on these platforms. At one end of the spectrum, you can access all your accounts, move money around internally, pay the bills, print off statements, and look at your investment portfolio – basically, everything you will ever need to do. At the other end of the spectrum, I’ve seen online systems that simply show you your account balances. The customer and I couldn’t even print off proof of their current transaction account. It comes down to what is important to you and what suits your needs.
Is a Branch Network important for you?
Are you a person who hates walking into a branch or are you a person that wants to talk to an actual person about a new credit card, for example, you’ve seen your bank advertise on TV? Quite often small ‘on-line’ lenders will appear with a very low rate, but as mentioned they are simply ‘on-line’. Your access to them will be via their platform, an email contact, and sometimes a phone number. If this suits you, this could be an option for you. If you want the option of going into a branch for whatever reason, then you will be better off looking at a lender that can cater to this. It comes down to what is important to you and what suits your needs.
Is the ability to Make Extra Repayments important for you?
It’s everyone’s intention to make extra repayments, but the reality is it doesn’t always work out that way. But do you want the ability to be able to do? The way the rates are positioned currently a 2 or 3 year fixed interest rate could be lower than the same banks standard variable rate product. This is fine, but a lot of fix rate products don’t allow you to pay extra or have a cap on how much extra you can pay per annum. If it is your first home loan and you are looking to create as much equity as possible quickly, then you need a product that allows you to do so. It comes down to what is important to you and what suits your needs.
This list goes on:
- Do you want an offset facility to coincide with your mortgage?
- Do you want all of your banking to be with 1 lender or are you happy to have different products at different lenders?
With so many lenders out there and with multiple products, it is hard to choose what product is best for you, and very easy to simplify it and go with the lender with the best advertised rate. This is what has been ‘drummed’ into us from a young age. It is important that you take a step back and look at the whole picture and try and find the product that suits all of your needs.
Author: Courtney Moores – Nash Financial Services
An unbiased and transparent online auction marketplace where banks and brokers fight for your home loan.
Disclaimer: This blog post has not taken into account your objectives, financial situation or needs. Due to this, before acting on any general advice/information in this communication, you should consider whether it is appropriate to your objectives, financial situation or needs.