There are lots of factors to weigh up when looking for a home loan, and the one which can have the biggest impact on affordability is the rate of interest you pay.
With that in mind, here are six ways to secure the best rates this year, at a time when conditions are particularly favourable for buyers.
Choose a lender with a track record for solid customer service
One of the main obstacles between homeowners and amenable mortgage rates is the sheer number of different deals, offers and options that banks provide.
Rather than having to sift through all the loan products yourself, it is better to pick a prospective lender that can do the heavy lifting for you, with customer service agents that are independently rated as excellent.
Check rates regularly
Another essential part of the process is to make sure that you compare rates at MoneyWise.com so that you can get an instant overview of the state of the mortgage market from day to day, and make an informed decision based on your findings.
Changes can occur quite rapidly, and certain mortgage products are only available for short windows, which is why it pays to be vigilant to the ebb and flow in order to pounce at an opportune moment.
Select lenders according to reputation & stability
Even if a home loan package looks tempting and offers a low rate of interest, it might not be the best deal in the long run if the lender providing it has a less than ideal reputation.
Likewise if a lender has a history of financial instability, or is encumbered with a broader loan program that is not especially competitive, then looking elsewhere is sensible. In short, do not be blinded by mind-bogglingly miniscule rates, but let the broader context sway you.
Consider fees, guarantees & repayment options
Delving deeper into the costs of a home loan means scrutinising any additional fees that a lender might charge to customers that decide to embrace its products.
While some loans might come free from fees, others could have a sizable premium to pay up front in order to unlock access to them. As such, fees have to be weighed up alongside rates to see whether the former eclipses the benefits of the latter.
Another element concerns whether or not the interest rate is guaranteed, or whether it has the potential to vary over time. Furthermore you need to examine the repayment options offered, not only when it comes to the duration of the loan, but also the possibility for early repayment without being charged, or the deferment of payments to help you cope in a crisis.
Look at locking in low interest rates
Most homeowners will want to have a level of stability with regards to mortgage repayments, which is why fixed rate products are often more attractive than those that fluctuate with the market.
You will usually have a choice between different terms over which lower rates can be locked in, and the route you take can alter the rates offered in the first place.
Once again it is all about striking a balance between the month to month affordability of the repayments, and the likelihood of rates rising or falling in the short to medium term.
Check credit score implications
Last but not least, you need to look at your credit score to see whether you will actually be eligible for the lowest home loan rates, as lenders will use this to work out whether you will be a reliable customer or a liability.
In short, comparing and contrasting as many packages as possible, while also knowing which factors you can influence to improve your prospects, should stand you in good stead.
