Nila Sweeney

While the comparison rate can be a useful tool Your Mortgage has gone even further and developed its own method to uncover the true cost of a mortgage.

The team at Your Mortgage has worked out the 'true cost' of the 28 three-year fixed rate products from the banks and 67 products from non-bank lenders in our books, by taking into account each and every fee, including upfront, ongoing and deferred establishment fees as 22 August 2008.

By working out how much a given loan will cost you after a range of time periods - three, five and 10 years - we show you the impact that these fees can have on the total cost of your mortgage. By adding all fees to the cost of principal & interest (P&I), we calculate the true cost of a mortgage over three, five and 10 years. This month, we have based our calculation on a loan amount of $300,000 at 80% LVR taken over 30 years.

And the winner is...

One Direct's 3-year fixed rate loan took the Editor's Choice award for the overall best value three-year fixed loan in the bank category thanks to it's low interest rate of just 8.79% and a default rate of 8.61% as at 22 August 2008. With total upfront fee of just $60 and nil ongoing fees, borrowers could save a hefty $23,545 over the 10 year period, compared to the average cost of the average 3-year fixed rate loan in our books.

MyRate's three-year fixed grabbed the top spot in the non bank category boosted by its low fees and interest rate of just 8.70%. After taking into account all the Over the five year period, this product could save you $7,917 compared to the savings you make with the average loan in our books.

For the complete list of top-ranking three-year fixed rate products, read the latest issue of Your Mortgage magazine, on sale now.

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