If you’re looking for a better home loan deal there is now an option that could be saving you thousands of dollars. Banks have taken note of the growing percentage of the population that are comfortable with shopping and doing their finances online. We’ve seen the success of high interest online savings accounts and now comes an even bigger step with reduced interest rate online only home loans. Under subsidiary brands such as UBank owned by NAB, or Bankwest owned by the Commonwealth Bank, banks are offering some super low interest rates exclusive to online customers. There’s less expense for the bank when you apply online and the banks are generously handing that saving over to you.
For an example of the savings available, we took a home loan of $500,000 with an average big four bank interest rate of 6.82% and compared it to the best online home loan rate of 5.62% offered by UBank. The big four loan racked up a cost of $21,720 over 1 year compared to the $17,276 for UBank’s online UHomeLoan. That’s an impressive yearly saving of $4,444 from the online home loan.
The only catch with most online home loans is that they are primarily catered for people looking to refinance their current mortgage, so you generally need to have a LVR less than 80% to catch the online home loan deals.
While the application is done online you still get access to phone help from the bank. The interest rate is already discounted so you don’t need to haggle for a better interest rate, exit fees have been scrapped and with comparison websites like Mozo, means looking for a home loan has never been easier.
Here’s some of the lowest rate online home loans:
*The Comparison Rate combines the lender’s interest rate, fees and charges into a single rate to show the true cost of a home loan. The comparison rate displayed is for $150,000 over 25 years, and applies only to this example. Fixed rate loans assume a 3 year fixed term. Different amounts and terms will result in different comparison rates. Full comparison rate schedules are available from lenders. Costs such as redraw fees or early repayment fees, and savings such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.