Getting the right home loan interest rate for your situation

Getting a home loan

We asked Australians what they are most worried about when it came to home loans. Their top answer? 66% of them are worried about getting the best interest rate.1

And no wonder. Getting a great rate can make all the difference to what's left in your pocket each month. Plus it can mean serious money - literally thousands of dollars - saved over the lifetime of your loan. 

But how can you find the right rate for your situation when there are so many rates, loan providers and offers in the market? This quick guide is designed to help.

The most important things you need to think about are:

1. Research, compare rates and talk to a few lenders. A mortgage is a big decision so it’s a good idea to explore what’s out there. In a competitive market, lenders may be prepared to offer you a good deal to get your business.

2. You need to know the different things that can affect the interest rate you’ll be eligible for – and how – such as the amount of your deposit, the source of your income, credit history, your assets/liabilities and the loan type you’re after. You may not be eligible for a headline rate but you can make sure you get the best rate for your situation by working with a lender Like Pepper Money who specialises in all types of home loans from standard (where you don’t have any criteria that might affect a loan to consider) to specialist (where you have a number of complex criteria to address).

66% of borrowers are worried about getting the best interest rate for their circumstances.

3. Remember that it’s not only about interest rates – it’s also about fees, insurances and loan features. Look at things like:

  • the repayment amount and whether it’s flexible as monthly, fortnightly or weekly to suit you
  • the total upfront and ongoing fees that would be charged
  • any loan insurance amount required (such as LMI)
  • whether additional repayments are allowed
  • whether you can get home loan pre-approval
  • the maximum loan to value ratio you can have (the percentage you can borrow against your deposit – called the LVR)
  • whether an offset account is available – an offset account is an account linked to your home loan. Any money you have in this account can offset the amount you owe on that loan, and you'll only be charged the interest on the difference.

By looking at these things as a whole you can get a much clearer idea of what’s right for your situation. To learn about the features on a Pepper Money home loan click here.

Top tips:

1. List all the different features against the loan product(s) you’re looking at - then ask each lender you’re looking at for the details you want to know – rates (fixed and variable), fees, repayment options (like interest-only periods or ability to pay back extra amounts), insurances, etc. – so you can compare them all clearly, side by side, to make that big decision.

2. Get help from a mortgage broker. They can help you to understand the range of options out there for you. 

3. Do an annual check-up every year to ensure you’re still getting the best deal possible.

If you want to talk to someone who can help, call Pepper Money on 137 377, or you can enquire online to request a call here. Alternatively, speak to an accredited Pepper Money broker for more information. They're there to help.

Want to get an estimate of your borrowing power? Find out now in a few simple steps.


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