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For most people, to evaluate a home loan they will focus too intently on the interest rate on offer. Banks are very aware of this and quite creatively will develop loan products which offer very attractive interest rates for an introductory period (usually 12 months).
In a climate where standard variable rates are approximately 7.00%, some lenders may offer "honeymoon rates". At first glance, this attracts the buyers attention, but we believe that a loan needs to be evaluated in its entirety (the total cost to the client over, say, 7 years).
At 6-Point, we believe in first discussing (generally) the types of loans available, their features and benefits, our customers circumstances, and our customers future plans. Most lenders will offer a range of products varying from lines of credit, basic variable rate loans, redraw facilities, offset facilities, fixed rate loans, split rate loans, salary crediting features, etc.
Once agreeing on a generic product type, we will consider what each lender has to offer upon reviewing their interest rate (now and after the introductory period), establishment fees, monthly fees, redraw fees, etc.
The truth of the matter is that there is no exact science to this as interest rates and fees will vary from time to time. The right product type will always be important though as will the lenders history and our customers strategy.
We have assembled a selection of helpful calculators to assist you with the purchase you are borrowing for.
Click to view the calculators...
