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Winning Features
Interest rate discount of around 0.30% from the bank’s SVR for the first two year
Current interest rate of 7.04%, capped at 7.54% for two years
Comparison rate: 6.80%
Maximum LVR of 80% without mortgage insurance
Unlimited extra repayments
No upfront costs such as application, mortgage settlement and mortgage establishment fees
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HomeStar’s latest offering, the Rate Stopper Loan, has come at an opportune time when rates are rising and borrowers are looking desperately for cheaper mortgages. With many economists predicting mortgage interest rates to peak at 9% or higher in 2011, the Rate Stopper Loan offers a safety net for the risk-averse homeowner.
The Rate Stopper is designed to offer the best of both worlds: the flexibility of a standard variable loan and the security that the interest rate will not rise past the capped rate of 7.54% during the first 24 months. The Rate Stopper Loan carries an initial interest rate of 7.04% – about 0.30% lower than the banks’ standard variable offerings. After 24 months, the interest rate reverts to an even lower rate of 6.64%.
The Rate Stopper also provides an added benefit of a reduced interest rate should the RBA decide to slash the official cash rate.
Borrowers can enjoy all the flexible features such as the ability to make free unlimited extra repayments and to access these excess funds at no costs. The Rate Stopper Loan allows up to four splits for free and the ability to switch to fixed without any fee as well.
On top of the attractive interest rates and flexible features, the Rate Stopper does not charge upfront costs such as application, mortgage settlement or establishment fees. This makes the product even more competitive and attractive.
Upfront costs have been one of the major hurdles preventing borrowers from switching loans to another lender. By removing this obstacle, borrowers can utilise a cheap loan with flexible features without having to worry about paying a hefty upfront cost when refinancing from a different lender.