Home loan interest rates are regularly in the news, but have been more so than ever in the past week...
By Xavier Quenon December 6, 2009
Home loan interest rates are regularly in the news, but have been more so than ever in the past week.
This has been due to the Reserve Bank of Australia’s third 0.25% rate rise in as many months on 1 December and the responses of the ‘big four’ banks in increasing their interest rates.
While National Australia Bank decided to increase its rates by the same amount as the RBA, the other three major banks have put up their rates by higher amounts, citing increasing wholesale funding costs.
Westpac raised its variable mortgage interest rate by 0.45%, the Commonwealth Bank by 0.37% and ANZ by 0.35%.
As a result, there is now a spread of 0.27% between the highest and lowest variable rates on offer among the major banks.
However, despite the media editorials and cries of outrage from the politicians, mortgage holders need to look beyond the ‘headline’ interest rates on offer when considering a home loan for a new property or to refinance an existing property.
The interest rate is certainly an important consideration and can play a significant part in how quickly a home loan can be paid off, but there is much more to selecting a home loan than the interest rate... especially when at the next rate rise the pendulum could swing away from the bank that is currently the ‘flavour of the month’ in favour of the current ‘black sheep’.
More important is consideration of the type of loan product and loan structure that will best suit your individual circumstances and financial goals. Ask yourself questions like – Is this loan going to maximise my tax situation? Is it going to enable me to pay off my home loan in under 10 years?
In the current environment your mortgage adviser adds more value than ever in knowing where to find the best deals but also pinpointing which lender will accommodate your unique personal circumstances.
The volatile and ever-changing home loan environment doesn’t mean that securing the right loan for your needs is an insurmountable task, but it is certainly a lot more challenging and time-consuming to wade through the policies, loan types, rates and lenders on offer.
At these times, the advice and guidance of your Go Mortgage Personal Mortgage Adviser is invaluable.
