If you are buying a new property, you might feel pressured to find the 'perfect' mortgage - but what does this mean?
The reality is that the perfect mortgage doesn't exist. What makes a home loan a good fit for a particular person or a couple depends on a number of factors, including your source of income, the price of the property, your personal circumstances and even your attitude toward risk.
By weighing up the pros and cons of various mortgages based on these criteria, you will be on your way to creating the 'perfect' home loan - on your terms!
Eligibility for your home loans
Certain home loans are naturally more suited to some people than others - there are products to appeal to every financial situation.
For example, if you are self-employed, you may not qualify for a traditional home loan - but other mortgage products, such as low-doc loans, might be a more appropriate solution for you, as they offer greater flexibility and less paperwork.
Types of loan to choose from
There are many types of home loans, but the most common mortgages are usually agreed with either a fixed or variable interest rate.
A fixed rate is exactly what it sounds like - the interest you pay is "fixed" for a period of time, which means that every month, you will know exactly how much you are paying. By contrast, a variable rate follows the market - as a general rule, you can look to the cash rate, which is adjusted monthly by the Reserve Bank of Australia, for an idea of how much you can expect to pay.
Fun with features
A home loan shouldn't be chosen based on interest rates alone. Features are another important consideration. For example, do you want to be able to make additional payments on your loan? Put your mortgage on hold for a month while you welcome a new baby? Borrow against your mortgage to fund a new business venture or a renovation project?
Choose the features that are the most relevant to you to get the best value from your loan.
MyRate reviews the best home loans on the market to find competitive products that suit your needs.