Find the Perfect Home Loan Features for Your Needs
Loans are by no means ‘one size fits all.’ Different loan types suit different age groups, different living situations and even different attitudes to money. One of the most important factors to consider when choosing a home loan is the interest rate.
There are three main types of home loans:
Variable rate loans offer greater flexibility than fixed rate loans. The interest rate on a variable rate loan can change over time, but you typically have the option to make additional payments at no cost. This can be a good option if you want the flexibility to make extra payments when you can afford to, or if you think interest rates are going to fall in the future.
Fixed rate loans offer more certainty than variable rate loans. The interest rate on a fixed rate loan is locked in for a set period of time, so you know exactly how much your monthly payments will be. This can be a good option if you want the peace of mind of knowing what your payments will be, or if you think interest rates are going to rise in the future.
Combo rate loans offer a combination of the flexibility of a variable rate loan and the certainty of a fixed rate loan. The interest rate on a combo rate loan is fixed for a set period of time, but you can then switch to a variable rate loan after that period. This can be a good option if you want the flexibility of a variable rate loan, but you also want the certainty of knowing what your payments will be for a certain period of time.
In addition to the interest rate, there are other home loan features that you should consider, such as:
Redraw facility: This allows you to access the equity in your home loan, which can be useful for unexpected expenses or for making renovations.
Offset account: This is a linked bank account that you can use to offset your home loan balance. This can save you money on interest, as the interest you earn on your offset account will be deducted from the interest you pay on your home loan.
Early repayments: Most lenders allow you to make extra payments on your home loan without penalty. This can help you pay off your loan faster and save money on interest.
The best home loan for you will depend on your individual circumstances and needs. It is important to compare different loans and to speak to a financial advisor to get the best advice for your situation.
White-label loans are another option to consider. White-label loans are essentially home-branded loans, much like the home-branded products you see in the supermarket aisles. Like these products, white-label loans aim to deliver many of the same great features as bank-branded home loans, but for a lower cost to the customer.
You can access different types of white-label loans, whether variable, fixed or combo. White-label products are known for being high quality, low-cost and flexible. They are particularly suitable for home-buyers looking for a simple, straightforward product as through white-label you can have access to the loan-features you need, (like redraw, debit card access and a customer care facility), and you don't have to pay for bells and whistles you won't use.
If you are not sure which home loan option is right for you, Alecto Finance can provide real value to customers who need a helping hand to make this important decision. Because Alecto Finance have access to a myriad of loans from a range of different lenders, you can receive independent, unbiased advice based on their expertise and experience in the industry.
Here are some additional tips for choosing a home loan:
Do your research: Compare different loans and find one that best suits your needs.
Speak to a financial advisor: A financial advisor can help you compare different loans and get the best advice for your situation.
Consider your budget: Make sure you can afford the monthly repayments.
Read the fine print: Before you sign any paperwork, make sure you understand all the terms and conditions of the loan.
Choosing a home loan is an important decision, but it doesn't have to be daunting. By following these tips, you can find the right loan for you and your family.