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 42 standard variable products from the banks and 147 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 July 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...

Members Equity Bank Super Members Home Loan bagged the top award in the bank division for the best value standard variable rate loan in Australia. The product emerged as having the best value of all the other banking products in the three year, five year and 10 year categories.

With interest rate as low as 9.04% as at 22 July 2008, the Super Members Home Loan could save you up $6,189 after 3 years,  $9,241 after 5 years and a massive $17,684 after 10 years compared to the average cost of standard variable rate loan product in our database.

Pacific Mortgage Group's PMG Standard Variable Rate has topped the non-bank sector and has dominated both the five and 10 year categories. The product has already won the Editor's Choice awards in the recent months thanks to its consistently low interest rates and zero start up and ongoing fees. It has also bagged the prestigious Mortgage of the Year Award for Best Variable Rate Loan in this year's competition.

Despite the $2,095 deferred establishment fee- the fee you will be charged if you repay your mortgage in full before three years - borrowers will still come out $7,237 ahead after three years compared to the average loan in our books. PMG Standard variable rate loan could save you $11,587 after 5 years and a massive $22,282 after 10 years.

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

 

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