compare mortgage rates calculator side by side

Introductory rates are sometimes used by lenders as an incentive or sales tactic to entice new customers, and while they may save customers in the short term, you should consider taking into account the revert rate and comparison rate too, as honeymoon rates can make some products appear artificially cheaper. This is usually a promotional interest rate that’s charged for a set period of time at the beginning of the loan term, before the loan reverts to a different, usually higher, rate. Some loans come with an introductory rate, also known as ‘honeymoon rate’. Read more about some of the up-front costs of buying a property. These will vary depending on your jurisdiction and the property you’re buying, but could include: In addition to loan fees, you may also need to factor in other initial costs when you buy a property. However, don’t forget to also factor in the interest rate charged when doing your sums, as well as the features on offer. Shopping around for a loan with low or no upfront fees, and saving for a deposit of at least 20%, are two ways you could save a considerable amount of money on your loan. If you’re purchasing a home with a deposit of less than 20% of the property’s value, then you will also likely incur a lender’s mortgage insurance fee which can be a significant amount. Some of the common up-front fees that lenders charge are at loan establishment fee for setting up the loan, and a security fee which some lenders charge in order to add the property you’re buying as security against the loan. If you’re taking out a home loan in Australia, it’s almost inevitable that you will incur some up-front costs, whether they’re related to the loan itself or as part of another aspect of the process of buying a property. The comparison rate takes into account the interest rate as well as factors like fees charged and is designed to give a more accurate idea of the true cost of a loan. You may also want to consider the fees charged by the lender, and the features on offer – for example, offset accounts which may help you save on interest.Īll loans must be advertised with a comparison rate as well as an interest rate. That said, the interest rate isn’t the only factor that can impact on the cost of a loan.

That’s assuming that all other costs like up-front or regular fees are the same for the two loans, and that both interest rates also stay the same throughout those 30 years. Interest repayments can add up to a very large amount when spread out over the term of the loan, so taking out a product with a lower interest rate could potentially save you a substantial amount.įor example, Canstar’s loan comparison calculator shows that for a $500,000 loan repaid monthly over 30 years, there would be a $106,931 difference between a loan with an interest rate of 4% p.a. A fixed rate home loan typically involves the borrower and lender ‘locking in’ a particular interest rate for a set period, after which time the rate will become variable at the lender’s discretion for the rest of the loan term. Some loans, known as split loans, have a combination of fixed and variable interest rates. Interest rates can be either variable or fixed. The exception to this is interest-only loans, where you would only pay back the interest for a set period, before the principal repayments would start. Instead, you would make regular interest repayments alongside your regular repayments of the amount you borrowed (the principal). It’s likely to be the biggest cost of taking out a loan, albeit not one that’s incurred up-front.

The interest rate on a home loan is often what many people pay the most attention to when comparing different products. What difference does the interest rate make? Use Canstar’s home loan selector to view a wider range of home loan products. *Comparison rate based on loan amount of $150,000 and a term of 25 years.

Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan, including the comparison rate, meet your needs and repayment capacity.

Choose between the First Home, Next Home, Investing and Refinance tabs to view results most relevant to you. Products shown are principal and interest home loans available for a loan amount of $500K in NSW with an LVR of 80% of the property value. If you’re in the market for a new home loan, the comparison table below features a snapshot of some of the outstanding value variable rate home loans on our database with links to lenders’ websites, sorted by comparison rate (lowest-highest) and then alphabetically by provider name. 5-Star Rated Home Loans on Canstar’s database

Compare mortgage rates calculator side by side