Expert advice on home loan tips (and traps)

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As Australians rush to get into the property market and take advantage of the low interest rates currently on offer, it’s hardly a surprise that new home loans are being taken out at record levels.

But hold on a moment, because we’re not talking about a small loan here - we’re likely talking about a loan in the six figures that you’ll be paying off over multiple decades! That’s why a bit of research and some extra knowhow could really pay off.

So whether you’re a first home buyer, a budding investor or an existing home owner looking to refinance, here are a few tips and traps from the Mozo experts you’ll want to keep in mind when you’re comparing home loans.

Expert home loan tips

1. Take advantage of low rates: Home loan rates are currently at some of their lowest points in years, but not all lenders are offering the same deals. To score a super low rate, you may need to look beyond the major banks to an online lender or challenger bank.

2. Make the most of features: Many loans come with features like offset accounts, redraw facilities and extra repayments. If you like the idea of paying off your loan faster, reducing the interest you pay or just having some extra flexibility, these features may be worth utilising.

3. Weigh up a fixed vs variable rate: Looking for repayment certainty? A fixed home loan which allows you to lock in a rate for several years may be ideal. Conversely, a variable rate may give you added flexibility and a more extensive range of features. Otherwise for the best of both worlds, many lenders allow you to split your loan into fixed and variable portions.

Home loan traps to avoid

1. Beware revert rates: Plenty of borrowers are locking in fixed rates while they’re low, but one thing to watch out for is the revert rate you’ll pay after the fixed period. These are often far higher, so it may be worth comparing your options before the fixed period ends or renegotiating with your lender.

2. Watch out for ongoing fees: Most lenders charge one-off upfront or discharge fees, but there are also ongoing costs like annual services fees which can really add up over time. That’s why comparison rates (which take rates and fees into account) are a handy guide.

3. Loyalty doesn’t pay: If you’re aiming to keep your rate as low as possible, loyalty to your lender is unlikely to be your best tactic. Many lenders don’t pass on their best rates to existing customers, which means your rate could get less competitive over time. So make sure you regularly review your offer and, if you’re not happy, don’t be afraid to switch!

Compare home loans - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <70% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.variable for 24 months and then 2.25% p.a. variable
    2.21% p.a.
    Go to site
    Details
  • placeholder
    UHomeLoan (1 Yr Fixed)

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 1 year
    2.31% p.a.
    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.
    Go to site
    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.32% p.a.
    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Variable Home Loan Special

    Owner Occupier, Principal & Interest, LVR <70%

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    2.02% p.a.
    Go to site
    Details
  • Hot Deal$3,000 cashback offer when you refinance your home loan to BOQ, offer ends 27 June 2021 (T&Cs apply)
    placeholder
    Mozo Experts Choice 2021
    Discount Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    3.05% p.a.
    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

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