It is Not Just The Rate

Loan	Mortgage Type	Application Fee	Rate	Enquire
FirstMac Fightback Premium Fixed	Honeymoon Loan	$256.25	3.49%	Enquire »

This looks like a great rate @ 3.49%, and it is. You may have noticed this rate as our lowest interest rate on our home loan comparison tools. Before looking to apply for this loan from FirstMac or using this 3.49% rate for your repayment calculations you need to consider the other elements that go into the cost of a loan - the fees, features, and the bell & whistles.

With this 3.49% home loan the loan has a much higher rate after year one. It has:

• an application fee
• valuation fee
• settlement fee on introduction 
• 5 years of exit fees starting at 2% of the loan amount.  

So, while the rate is great, there are certainly other factors to consider. It may be not such an attractive option for your needs.

1 year Honeymoon Rate Loans are poor choice?

Does this mean that one year honeymoon rate loans are a poor choice? Quite often, yes. But not always.

Earlier in the year St George had a unique one year, honeymoon type loan that reverted to a pretty good and cheap rate after that first year. This is pretty rare though. St George is not currently running this promotion and in general, just like with the 3.49% FirstMac Loan, there are heavy exit fees attached to honeymoon type loans for several years with expensive rates and terms after the first year.

Sometimes these honeymoon loans can be the way to go. With research you can find the lowest possible exit fee and rate combined and with a large loan size the rate during the first year is worth paying the exit fee for. Of course, you have to be willing to move/refinance your loan one year down the track. I must admit after 6 years in the industry I personally have only organised loans with this specific strategy maybe a few times out of hundred's of loans.

Savings come not only from the Rate

The truth is that what you really want is not just a low interest rate. You want a loan that is perfectly suited for you, your situation, your circumstances and your strategies in mind. You want to be taking into account the rate yes, also every introductory fee, ongoing fee, exit fee and feauture of the loan.

It is difficult, confusing and hard task. There are over 100 lenders in Australia, they each have maybe eight or nine loan packages. They have hundred's of their own unique hidden internal policies and promotions that are ever changing.

We finance brokers (aka Rate Detectives) here find that task interesting - it's literally our job day to day to be on top of the products in the market. It is what we do all day long. Personally, I enjoy searching for all the hidden fees and features of different loans, and all the exciting possibilities that opens up for my clients.

Contact us to find out your Savings

Fill out the contact form on this page or give us a call. I would be more than happy to help provide a comparison with any loans you may be looking at or qualify you for finance and discuss your options. I can often save you significant money - and then help you make sure your home loan application process is as painless as possible.