Comparing home loans? Find out which is the 'perfect match'

Tuesday 24 November 2009

Article by Mozo

People looking to compare home loans may find it difficult to know which deals are best for them.

New Limited drew on the experience of Lisa Montgomery – a consumer advocate at Resi Mortgage Corporation – in order to gain some clarification.

House hunters may find the "perfect match" when they understand the structure of home loan offerings.

Ms Montgomery pointed out that variable rate mortgages tend to be the most popular as they follow official interest rates set by the Reserve Bank of Australia and can provide flexibility.

Fixed rates, on the other hand, ensure that "someone always loses", she remarked. This is because these products have a set level for a set period.

People getting their foot on the property ladder may be more enticed by honeymoon offerings, which are cheaper than standard variables by between 0.5 and one per cent, for a set period.

Meanwhile, tracking rates are "’tracked’ against the average standard variable rates of the big four banks and are promoted as being lower than those rates".

Another problem people may encounter while comparing home loans is the fact that less people want to move now than a decade ago, according to Commonwealth Bank.

This article is brought to you by Mozo – Helping you compare home loans
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