Home Loan Broker in Rockingham Says: “Don’t Ignore These Five Crucial Factors when Choosing a Variable Rate Loan.”
Announcement posted by Smartline Rockingham 18 Dec 2015
Home loan broker at Smartline Rockingham reveals the five factors that can cost or save a homebuyer thousands of dollars.
Rockingham, WA, 18 December 2015 - In the midst of record low interest rates, homeowners and homebuyers are scrambling to find fixed rate loans at the lowest possible rates. However, according to one home loan broker in Rockingham, a fixed rate mortgage isn’t always the best bargain.
Justin Smith is a home loan broker at Smartline Rockingham who has more than 27 years of finance industry experience. According to Mr Smith:
“Everyone wants the lowest interest rate on their home loan. However, the interest rate isn’t the only factor that determines how much a borrower pays back on their loan. Often, a variable rate loan is the better choice due to its flexibility. Variable rate loans offer a plethora of features that fixed rate loans don’t. While fixed rate loans are a great bargain right now, some people are better off with a variable rate loan, depending upon their financial situations.”
Recently, Mr Smith revealed four important features often included in variable rate home loans that can save a borrower thousands of dollars, even if the interest rate is slightly higher at times. While variable interest rates can be fluid, the fees, terms and conditions are there for the life of the loan. We have included summaries of the four important features of variable rate home loans below.
Competitive Rates and Fees
While variable rate home loans can often seem to be riskier than fixed rate loans because of fluctuations in interest, variable rate loans usually offer lower fees and more flexibility than fixed rate loans. Mr Smith recommends that all borrowers obtain a “fact sheet” to learn exactly how much each dollar they borrow is going to cost them in return. Lower fees can more than offset fluctuating interest. It’s important to know either way.
Extra Payments with Redraw Facility
Borrowers who choose variable rate home loans usually cite flexibility as their main reason behind their decisions. Many variable rate loans allow the borrower to make extra payments which reduce their interest at no extra charge. These payments reduce the interest while providing a “buffer” to help in case of financial emergencies.
Offset Account
Many variable rate home loans allow the borrower to link to an “offset account.” Mr Smith recommends variable rate loans with 100% offset accounts. These pay the same interest on the funds in the account as the borrower does on the home loan. The account can be used just like a standard bank account, including use of an ATM for fast access.
Accelerated Repayment Schedule
Many variable rate home loans allow for fortnightly repayments. These add up to an extra “month” worth of payments, as they are made over 26 fortnights as opposed to the equivalent of 24 fortnights for a monthly repayment schedule. A homeowner can save $86,842 and knock five and a half years off of a $350,000 loan at 6% with fortnightly repayments.
According to Mr Smith: “We can’t say whether or not a fixed rate or a variable rate home loan is right for everyone, but it’s wise to call a mortgage broker and find out what is right for you.”
The home loan brokers at Smartline Rockingham have more than 48 years combined experience in the finance industry. They work with a network of 28 different lenders who offer more than 300 different combined credit products. They combine a great work ethic with encyclopedic knowledge of the local market. To learn more, call 1300 958 730 or visit their website: http://www.mortgagebrokersrockingham.com.au/.
Justin Smith is a home loan broker at Smartline Rockingham who has more than 27 years of finance industry experience. According to Mr Smith:
“Everyone wants the lowest interest rate on their home loan. However, the interest rate isn’t the only factor that determines how much a borrower pays back on their loan. Often, a variable rate loan is the better choice due to its flexibility. Variable rate loans offer a plethora of features that fixed rate loans don’t. While fixed rate loans are a great bargain right now, some people are better off with a variable rate loan, depending upon their financial situations.”
Recently, Mr Smith revealed four important features often included in variable rate home loans that can save a borrower thousands of dollars, even if the interest rate is slightly higher at times. While variable interest rates can be fluid, the fees, terms and conditions are there for the life of the loan. We have included summaries of the four important features of variable rate home loans below.
Competitive Rates and Fees
While variable rate home loans can often seem to be riskier than fixed rate loans because of fluctuations in interest, variable rate loans usually offer lower fees and more flexibility than fixed rate loans. Mr Smith recommends that all borrowers obtain a “fact sheet” to learn exactly how much each dollar they borrow is going to cost them in return. Lower fees can more than offset fluctuating interest. It’s important to know either way.
Extra Payments with Redraw Facility
Borrowers who choose variable rate home loans usually cite flexibility as their main reason behind their decisions. Many variable rate loans allow the borrower to make extra payments which reduce their interest at no extra charge. These payments reduce the interest while providing a “buffer” to help in case of financial emergencies.
Offset Account
Many variable rate home loans allow the borrower to link to an “offset account.” Mr Smith recommends variable rate loans with 100% offset accounts. These pay the same interest on the funds in the account as the borrower does on the home loan. The account can be used just like a standard bank account, including use of an ATM for fast access.
Accelerated Repayment Schedule
Many variable rate home loans allow for fortnightly repayments. These add up to an extra “month” worth of payments, as they are made over 26 fortnights as opposed to the equivalent of 24 fortnights for a monthly repayment schedule. A homeowner can save $86,842 and knock five and a half years off of a $350,000 loan at 6% with fortnightly repayments.
According to Mr Smith: “We can’t say whether or not a fixed rate or a variable rate home loan is right for everyone, but it’s wise to call a mortgage broker and find out what is right for you.”
The home loan brokers at Smartline Rockingham have more than 48 years combined experience in the finance industry. They work with a network of 28 different lenders who offer more than 300 different combined credit products. They combine a great work ethic with encyclopedic knowledge of the local market. To learn more, call 1300 958 730 or visit their website: http://www.mortgagebrokersrockingham.com.au/.
Media Contacts
Justin Smith
Columnist, Herald Sun; Contributor, Sky News Australia; Sky News TV - Chris Kenny Tonight; Channel Seven Sunrise
