Compare Loans for Australia

Home Loans Compared

We do not currently have any Home Loans products to compare.

Home Loans Explained

Many people cannot afford to pay for a new house outright and instead borrow money from a bank in the form of a home loan in order to complete their purchase. The main thing to check when comparing home loans is the interest rate, though there are a number of other things that should be considered. There are many types of home loan products on the market designed to suit people in different situations.

Standard Variable Rate Home Loans

Standard variable rate home loans are loans that have a floating rate of interest that move in line with the official rate of interest set by the Reserve Bank of Australia. These are suitable for borrowers who believe that interest rates are likely to fall because obviously lower interest rates mean the cost of the loan also falls.

Fixed Rate Mortgages

Fixed rate mortgages or table loans are the most common type of home loan because it lets borrowers make regular repayments every week or month, Whilst the borrower does get certainty, they will not benefit from lower interest rates should rates fall. It should be said that should rates rise, then they do not have to pay higher rates either.

Interest-Only Loans

Interest-only loans allow the borrower to defer repayment of the principal amount for a specified period of time and only make the interest payment during the interim. It is expected that a repayment loan is taken out at a later date or that the principal is repaid in a lump sum.

Reducing Balance (Non-Table) Loans

Reducing balance (non-table) loans structure higher payments at the beginning of the repayment period which fall over the lifetime of the loan as the interest and principal amounts decline.

Revolving Credit Loans

Revolving credit loans operate like large overdrafts, in order to reduce the amount of interest payable it is best to keep the balance of the loan as low as possible by crediting salaries in the loan account and using the account to pay for things as they arise.

Offset Home Loans

An offset home loan links the loan to what is called an offset bank account, so the interest earned on your savings offsets the interest payable on your home loan. When the mortgage lender calculates the interest owed on the mortgage, the balance held in the offset account is deducted from the amount owed as mortgage and then the interest is calculated.

For example a borrower with a $250,000 home loan and a $50,000 balance held in the offset account will see the latter deducted from the former, and interest calculated on $200,000.

The big advantage with offset home loans is they allow the borrower to pay off the debt much faster than would otherwise be possible. So long as the borrower keeps depositing money in their offset account as often as possible and maintain the highest balance they can for the longest period of time, they will see will pay down the debt much faster than a regular home loan.

Offset home loans tend to attract both additional fees and higher interest rates. So a calculation has to be made by the borrower on how much balance they think they can hold in the offset account to make the offset home loan worthwhile.

Latest Compare Loans News from the comparedinkum Blog

Second Hand Car Loans Make Car Ownership Affordable

According to the latest research, Australia appears to be a nation of second-hand lovers with over 90 per cent of the population having purchased at least one second item at some point in their lives. The research suggests that 100 million items were sold on Gumtree over the last year, with 43 per cent of buyers claiming they saved as much as 50 per cent off the purchase price of the item were they to have bought the item brand new. Continue reading

Low Interest Personal Loans Can Be Used To Consolidate Debt

According to the latest data, nearly half of all Australian credit card holder say they find it difficult to make payments that exceed their minimum monthly repayment on their outstanding balance. Not only do these borrowers struggle to make the minimum payment they also seem to be unable to pay down their debt during the interest free period. An ASIC report published recently found that the total outstanding credit card debt in Australia is $45 billion. Continue reading

Mortgage Lending Criteria Tightened Leaving Many Borrowers In A Pickle

As variable home loan rate changes have been made, it should come as no surprise that many Australians are rethinking their existing mortgage. Thousands of property owners in the country are set to become so called “mortgage prisoners”. This is when a homeowner cannot obtain refinancing because they no longer meet their mortgage lender’s lending requirement even if they have made every repayment on time.

Continue reading

Latest from Twitter