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Many borrowers often make the mistake of looking for a lender that offers the lowest interest rate instead of taking the time to check all the available options and asking the right questions.

Taking out a home loan is a huge financial decision, and you would need a little more time to scrutinise and find which ones are worth pursuing. There are many other components that can affect how much you spend or save over the life of the loan, and this is one aspect that you should be able to ask your potential lenders.

Asking the right questions is the key — below are 10 of the most crucial questions you should ask lender to know find the right loan for you.

1. What is the comparison rate?

While it is a legal requirement for lenders and home loan providers to display the comparison rate next to the advertised rates of their home loans, some borrowers might still get confused. This makes it important that you ask your lender about comparison rates.

In simplest terms, a comparison rate is a number that encapsulates all the fees and charges that come with the loan, giving you an idea of what you will be spending once you end up getting the home loan. Most of the time, comparison rates are higher, especially if the loan comes with other features and some fees.

There are times, however, that comparison rates are the same with advertised rates. This is true for some no-frills, basic home loans with no fees and no extra features.

It is also possible for comparison rates to be lower than the advertised rates, especially in the case of fixed rates being higher than the variable rate at the time of application. Comparison rates can also be lower than the advertised rates when lender offers discounts over the life of the loan.

To help you see the current home loan rates available in the market, use this comparison table:

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
Featured Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
5.99% p.a.
6.14% p.a.
$2,396
Principal & Interest
Fixed
$10
$0
90%
5.79% p.a.
6.39% p.a.
$2,344
Principal & Interest
Fixed
$350
$210
95%
5.99% p.a.
5.99% p.a.
$2,396
Principal & Interest
Variable
$0
$150
60%
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
90%
4.5 STAR CUSTOMER RATINGS
  • Low rates for purchase and refinancing
  • Simple online application process
  • No fees, unlimited redraws, 0.10% offset 
6.04% p.a.
7.15% p.a.
$2,013
Interest-only
Fixed
$0
$180
90%
6.09% p.a.
6.35% p.a.
$2,421
Principal & Interest
Fixed
$6
$799
80%
6.14% p.a.
6.17% p.a.
$2,434
Principal & Interest
Variable
$0
$445
60%
6.14% p.a.
6.15% p.a.
$2,434
Principal & Interest
Variable
$0
$0
80%
6.19% p.a.
6.44% p.a.
$2,447
Principal & Interest
Variable
$248
$350
80%
  • $0 application fee
  • Fast turnaround times
  • Estimate your borrowing power in as little as 1 minute
6.59% p.a.
7.36% p.a.
$2,552
Principal & Interest
Fixed
$8
$0
70%
6.74% p.a.
7.37% p.a.
$2,592
Principal & Interest
Fixed
$0
$160
90%
6.84% p.a.
7.16% p.a.
$2,726
Principal & Interest
Variable
$0
$0
95%
More home loans
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .



2. What is the best rate you can offer me?

As the mortgage industry is extremely competitive, you have the opportunity to negotiate with your lender about the interest rate being offered. Advertised rates are not set in stone — you can still get a lower rate if you just ask your potential lender about their options.

There are certain arrangements that can help you lower your rate, like making a bigger deposit, or perhaps getting a bundle. Many of the bigger lenders will be open to discussing different options with you.

3. What repayment options do you have?

Typically, lenders offer either monthly, fortnightly, or weekly repayments. Still, it would be useful to check what repayment frequency options are available, as you may wish to change payment frequencies in the future. However, you should check if there are any fees involved in changing repayments as some lenders may charge fees.

4. What home loan features do you offer?

Going beyond interest rates means also considering home loan features as factor when choosing home loans. Home loan features allow can help you save thousands of dollars on your home loan. However, some lenders may charge fees on these features, which could end up costing you money — better to ask all the necessary information about these features before signing any deals.

5. What information do I need to provide for my application?

Even if this is not your first rodeo, it still pays to check with the lender what documentation is necessary for your application. This is especially important if you are applying with a different lender, which may have its own rules. The sooner you provide all the information, the quicker they can process your loan application.

6. How long will it take for my loan to be approved?

Time is sometimes important for many homebuyers, particularly when competition is high. This is an important question to ask as it will not only give you a timeframe to work with, but it will also give the lender a deadline to ensure your application is not dragged out.

7. Are there any loyalty benefits?

This is a great way to see if lenders value their customers throughout the loan term, not just at the beginning. Lenders who are determined to keep their customers will often offer loyalty benefits after a certain period. This is often in the form of a bonus rate drop or discounts on other financial products.

8. What amount is required for the deposit?

Lenders use the loan to value ratio (LVR) to determine how much you can borrow and this will affect the deposit amount you will need to save. Most banks typically require an 80% LVR, which means that you will have to provide an equivalent of 20% of the property’s value as your deposit upfront. Lenders have their own maximum LVRs, which means you can potentially borrow more, even up to the full amount of the property.

9. Will I need to pay Lenders Mortgage Insurance?

This question relates to the previous one — Lenders Mortgage Insurance (LMI) has a purpose of protecting the lender in the situation where you are unable to meet repayments. Most lenders will charge LMI if the LVR is over 80%, however, you should check with your lender as they may offer high LVR loans without insurance.

Use our LMI calculator tool to find out the possible cost of your LMI: Lenders Mortgage Insurance

10. Are you a member of the Mortgage Finance Association of Australia?

This question might be overlooked but it is crucial to check if your lender, especially if it is a small one, is a member of the MFAA.

The MFAA has a Code of Practice which supports ethical behaviour and professionalism. If a lender is a member of the MFAA, they are required to adhere to the code, and you can have greater confidence in the services the lender provides.