Christmas comes early for borrowers with heaps of home loan rate cuts

What to look for in a low rate home loan

A competitive comparison rate. When you’re comparing low rate loans, make sure to take a look at the comparison rate, as well as the headline interest rate. “The comparison rate reflects fixed fees and the interest rate, so it gives you a more accurate idea of what a loan will really cost you,” explains Lamont. A low interest rate paired with a high comparison rate can mean you’ll be up for a bunch of hefty fees!

Key money-saving features. Full feature home loans are generally more expensive than their no-frills counterparts. So to keep your mortgage rate low, choose an option that includes the features you will use and not the ones you won’t. “Pick and choose the extra features you’ll really use. For example, an offset account can save you heaps, but there’s no point paying extra to have it if you don't actually use it,” says Lamont.

An LVR that suits your budget. Some of the lowest rates around are reserved for borrowers with a low loan-to-value ratio - meaning a bigger deposit. So the more you can save for a home loan deposit, the more likely you will be able to snag a rock bottom rate and save on interest. “One thing to keep in mind is that if you have less than a 20% deposit, you’ll probably wind up paying Lender’s Mortgage Insurance as well, which can add thousands of dollars onto your home loan bill,” says Lamont.

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