Nila Sweeney

With so many lenders and loan features on the market, we show you how to make sure you choose the mortgage (and lender) that delivers the rates, service and flexibility you need.

The home loan market has entered a new level of complexity in recent years, as lenders have recognised that consumers are better informed, and have a wide range of different needs. And, lenders have matched these needs with gusto!

But before you even consider which loan is right for you, you need to think carefully about what your needs are, advises Brian Rusten from Energise Home Loans.

“Different loan features are right for different circumstances, so being clear on what your needs are from the beginning will help prevent you from being bamboozled,” Rusten says.

“Consider options like a fixed or variable rate, split loan terms, principle and interest repayments or an interest only loan, or the future need for a repayment holiday.”

While it’s great to be spoilt for choice, many borrowers find themselves overwhelmed by too many options. Rusten offers the following advice when trying to find the right home loan to suit your specific needs.

1. It’s what’s inside that counts. “It’s easy to be won over by a great looking interest rate, but there is far more to the story than meets the eye,” he says. “Advertised low interest rates are like the sales rack strategically placed at the front of your favourite store – they are designed to entice the borrower to come window shopping. But not all loans are created equal – the real story is in the fees and charges attached to the loan.” Reviewing the mortgage comparison rate allows you to compare apples with apples, as this is an overall percentage figure, calculating the interest rate as well as the fees and charges.

2. Consider your service requirements. Some customers have straightforward requirements from their lender – basic updates on the progress of their loan, little need for face-to-face service, emailed statements. “In this case, a no-frills lender may easily fit the bill, where you get fewer bells and whistles in exchange for a cheaper loan,” Rusten says. “Other customers’ needs may be more complex, and they would be better to go with a lender that can meet these demands, sometimes at a slightly higher price.” 

3. Do you need funds in a hurry? The real estate market can move quickly, and sometimes buyers can be caught out having found the perfect property before their finance is in place. “You need to be very clear with your lender about what your timeframe is, as there is a dramatic range of timeframes in which different lenders can approve and finalise your loan. We’ve seen many customers whose choice has been dramatically narrowed because they’ve needed funds quickly, and their preferred lender could not finalise the loan in time.” To prevent this from happening to you, securing pre-approved finance is a clever strategy to ensure you are in control and have access to your full choice of lenders.

4. Don’t be afraid to ask for help. “If you don’t know exactly which loan features are right for your circumstances, be as clear as possible when discussing what you’re trying to achieve, to allow your lender or mortgage broker to help match you to the best loan to meet your needs,” Rusten says. Keep in mind that mortgage brokers deal with lending every day, so they know the tricks of the trade that can mean the difference between your loan being approved or not. They also assist in preparing and submitting all of the paperwork for you, allowing you more time to focus on the fun parts of property buying.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan