Interest Rate update:
Sunday 19 January 2020
First Home Buyers with small deposits can save more by comparing
Up to ten thousand home buyers with small deposits will be assisted into their first mortgage in 2020 by the federal government’s First Home Loan Deposit Scheme, currently only available through Commonwealth Bank and National Australia Bank.
All these borrowers will have low deposits (under 20% LVR, as low as 5% LVR).
“First Home Loan Scheme borrowers face higher repayments than borrowers with bigger deposits,” said Vadim Taube, Chief Executive Officer of InfoChoice, a leading Australian financial comparison site since 1993.
“So, it’s important to get a good value loan with a competitive rate to ensure you are paying as little as possible in repayments.”
“Big banks often give discounts to smart borrowers who have compared the market and know what the best deals are,” said Vadim Taube.
“That applies to Commonwealth, NAB and most other major lenders.
“If you are applying for a first home loan deposit scheme home loan through CBA, NAB or one of the other lenders who will come on board in February, make sure you have compared their loan rates with the best in the market,” said Vadim Taube.
Fixed rate mortgage market very competitive in January 2020
CBA and NAB have two-year fixed rate specials for first home buyers and owner occupiers.
Well Home Loans has a 2 year fixed rate of 2.68% pa, (OO, P&I, comparison rate 2.75% pa) with a maximum LVR of 90%, according to the InfoChoice database of 1800 Australian home loans from 145 institutions.
Variable rate mortgage market: 20 loans < 3% in January 2020
There are 20 variable rate mortgage products now with advertised rates under 3.0 per cent pa, according to InfoChoice (see table below). Most borrowers choose variable rates and the RBA has signalled that rates are heading down in 2020.
FHBs with small deposits can save $10,000 by comparing
A first home borrower with just 10 per cent deposit could save $10,000 or more over the life of a 25-year loan by choosing a cheaper loan said Vadim Taube, CEO of InfoChoice.
For owner-occupier borrowers wanting a $500,000, 25-year, variable, P&I loan, the difference between the most competitive rates and the most competitive major lender variable rates is worth over $35 per month in repayments according to the InfoChoice Refinance Calculator.
“First home buyers facing higher repayments because of their low deposit can save plenty each month and over the life of their loan by comparing rates,” said Vadim Taube.
“Talk to your lender and let them know that you know the best rates in market are less than what they are currently charging you.”
Go straight to the latest rates information from individual banks and other institutions here.
For more information on Savings account rates, data and commentary, please contact:
Jason Bryce, Media Manager on 0428 777 727 [email protected]
For more comments, please contact: Vadim Taube, Chief Executive on 0403 580 794
* listed on InfoChoice’s database of 1800 home loans and 145 institutions in Australia.
InfoChoice compares financial products from 145 banks, credit unions, authorised deposit-taking institutions, non-bank lenders and other financial product providers in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.
Comparison rate is based on a secured loan of $150,000 over the term of 25 years. WARNING: These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan
InfoChoice is a leading Australian comparison website for retail banking and personal finance products. We’ve been helping Aussies find great offers on credit cards, home loans, savings accounts, term deposits, personal loans and car loans for over 25 years. Our mission is to help consumers make an informed purchasing by bringing together the most comprehensive list of financial products on the market today.
At InfoChoice, we strive to be:
• Comprehensive. We compare more than 3500 individual products from 145 providers within Australia to offer you the best value.
• Informative. We know how important it is for you to crunch the numbers before buying. Our calculators help you understand the cost of different products over the long term and show you the potential savings.