Home loans are no longer just about signing up for 30 years and making regular loan payments – nor even just about trying to pay off the mortgage as quickly as possible. Flexibility and peace of mind are just as important, and there is a range of loan options that offer such benefits. However, these extras can cost money, and the key feature is still the interest rate. It is a norm that before the settlement of the house, you would be very concerned with the interest rate, and you would be picky even if the difference is as low as 0.5%. However, like most of us, after the settlement of the house, normally one would just let its home loan sit idle on the desk collecting dust, and not managing it properly to see to that it still has the lowest interest rate on the marketplace. For a $1million home loan, the difference between a 4.4% and 3.6% rate would be $4,500 each year.
EndureGo Finance as one of the best mortgage broker in Ashfield Sydney and Adelaide will strive to get the best deal for you. We will review our client’s home loan on an annual basis o ensure that the loan still has the lowest interest rate and the loan still are tax effective in term of negative gearing and will still give you the maximum tax refund in the years to come.
It is essential that we understand the core components of the home loan process, which is to select a correct product to meet your need whether it is owner occupied or investment home loan. As if you structure the wrong product, it might be that your tax effectiveness and the future risk will be affected.
- Basic or vanilla loans: no frills loans with few features and the home loan interest rate will include a discount from the standard variable rate. Many now offer redraw facilities, but there can be restrictions and fees, so a basic loan may not suit if you want to make extra repayments and access them later. Most of the basic home loan does not have offset account, and will not be suitable if you have multiple loans with the same financial institution.
- Standard loans: offer more flexibility than basic You can redraw any extra money you’ve paid in, for example, and have the option to switch to a fixed rate, or split the loan into a fixed and variable portion. They also often offer a 100% offset account. However, standard variable home loan generally will not include any discount, it is the reference product when you want to compare the interest rate from a different product. Most of the basic home loan, package rate or fix rate will include a discount from the standard variable rate.
- Home loan package: a standard loan with an interest rate discount of up to 1.2% depending on your loan amount, the financial institution and the broker representing you and how well they can negotiate the interest for you. It is cheaper than many basic The package normally includes a free transaction account, no annual fee credit card and one valuation fee for multiple properties. However, package loan usually will include an annual package fee which will be tax deductible.
We will publish two more articles on the importance of choosing either the fixed or variable rate, and the different fee strucutes of a home loan produce and the relevances to the tax effectivness of your home loan.
We would welcome you to give us a call on 02-8958-1959 or send your enquiry via https://www.endurego.com/online-booking/
Let us help you to settle your house on time. We will help you to negotiate with the banks to get the lowest interest rate at the settlement time, and also review your home loan on an ongoing basis to make sure your interest rate of the settled home loan is still the lowest in the marketplace.