Sydney’s Credit Mortgage Loan Comparison: Finding Profitable Deals – Compare some of the best home loans offered by top Australian lenders for buying, refinancing, investing or building a property.

Basic criteria of: a loan amount of $400,000, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows calculations to be made on variables as selected and entered by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which will be clearly published on the product provider’s website. Monthly repayments, if the basic criteria have been modified by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. * The comparison rate is based on a loan of $150,000 over 25 years. Warning: This comparison rate is only true for this example and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. Rates correct as of 24 September 2023. View disclaimer.

Sydney’s Credit Mortgage Loan Comparison: Finding Profitable Deals

In this video, our financial journalist Harry O’Sullivan walks through some of the top home loan deals currently on the market for owner occupiers looking to buy or refinance:

Non Bank Lenders Australia

Click here for more information about how we selected these products, the products we compare, how we make money, and other important information about our service. Rates correct as of 19 September 2023. View disclaimer

A home loan is an amount of money borrowed from a lender to finance the purchase of a home or investment property. The borrower repays this debt with interest in regular installments over an agreed term, typically 25-30 years. To provide the lender with security, the property is held by the lender as collateral until the loan is paid off – an arrangement known as a mortgage.

Interest is the biggest source of the cost of a home loan, with the typical borrower paying hundreds of thousands in interest over the life of a loan. So naturally, a lower interest rate can save you a lot of money on a home loan.

If you have an existing home loan, you can save by refinancing to a home loan with a lower interest rate.

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Lower interest rates are the key to generating big on your home loan. Even a slightly lower rate can save you thousands. Let us demonstrate.

Let’s compare two 30-year home loans, one at 5.00% p.a. and another at 5.50% p.a. No home loan has an introductory rate or upfront or ongoing fees.

The table below shows the difference in monthly repayments for different loan amounts, plus the total interest cost over the life of the loan.

If you​​​​​​are ready to refinance or just get into the market, websites like these would be a good place to start your search.

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The cash rate is predicted by some economists to exceed 3% in the near future, but much of it depends on economic factors such as inflation, wage growth and unemployment. A cash rate of 3% would see many home loan rates sitting in the 5-6% p.a. range.

This is after the cash rate hit a rock bottom of 0.10% in November 2020, when some home loan rates were below 2% p.a.

Lenders have wasted no time in raising mortgage rates, but some are offering much lower rates than others, so there are still some to be had.

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Why Do Investors Pay More For A Home Loan?

Most home loan terms are between 25-30 years, but a handful of lenders in Australia offer loan terms of up to 40 years.

A credit rating is a numerical score that represents your trustworthiness as a borrower. The higher the score, the more reliable a borrower sees a lender. Your credit score can determine how much a lender is willing to lend you for a home, what interest you’ll have to pay, and whether you can afford to meet your repayments.

Equity in a home is the difference between the value of your home and how much you owe on the mortgage. For example, if your​​​​ property is worth $500 000 and you still owe $300 000, your equity is $200 000. Our equity calculator can help you find out how much equity you have in your property.

The application process for home loans can be quite lengthy, but is not overly complicated. It will generally include the following steps:

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Fixing your home loan can be good for those who need certainty of cash flow, which is why many investors and first-time buyers choose them. If interest rates are very low, locking in that low rate before they rise can be a good idea. However, this can also come back if the interest rate drops even further, because these changes only apply to variable housing loans, not to fixed housing loans. It can also be more difficult to repay a fixed rate loan early because you have to pay significant break costs before ending the fixed rate period.

If your current lender can no longer offer you what you need, it may be time to refinance your home loan. Shop and compare new home loans, calculate the cost of switching and consider the length of the new loan. Once you’ve found the ideal loan, apply through the lender and ditch your old home loan.

A comparison rate helps you find out the true cost of a loan by combining the interest rate plus a number of fees and charges you can expect to pay over the life of the loan into a single percentage figure.

How much you can borrow for a home loan will depend on many factors such as your income, your history, your monthly living expenses, and any outstanding debts you may have. However, it is generally recommended that you do not borrow more than 80% of the value of the property, which means that you must have at least a 20% deposit saved. Use our calculator to find out how much you can borrow.

Compare Home Loans: Monthly Vs. Fortnightly Payments

A rescheduling facility is a home loan feature that allows borrowers to withdraw additional repayments they have made on their home loan. Redraw facilities are useful if you want to reduce your loan amount as quickly as possible, while still being able to access those funds at some point in the future if a financial emergency or other situation arises where you may need that money (such as a renovation).

An offset account is a transaction account linked to your home loan where the money stored in the account is ‘offset’ against your home loan debt when interest is calculated, reducing the amount of interest on your loan.

The amount required for a house deposit varies, but you will usually need at least 5% of the property’s value, which is an LVR (loan-to-value ratio) of 95%. To avoid paying Lenders Mortgage Insurance (LMI) most lenders will require you to provide a deposit of 20% of the value of the property.

A mortgage default (missing a repayment by 90 days) will not bankrupt you, but will require you to pay a late fee of up to $ 200. This may seem relatively small, but default on your mortgage will also be recorded on your credit file, harmful your credit score.

Caveat Vs Short Term Mortgage Loans

The time it takes for a lender to approve your home loan can vary from lender to lender, but it takes anywhere between four to six weeks. You can speed up your home loan approval by making sure you meet all the loan criteria, have all your paperwork ready and fill out the application form correctly, have a good and credit history and get pre-approved.

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