Developed in response to the increasing number of consumers going online to search for a home loan, the new service helps you compare loans and does away with repetitive form-filling.
Consumers researching for home loans via comparethemarket.com.au will have access to brokers with knowledge of over 1,350 products from 29 of Australia’s most reputable lenders. Acting as a central point of information throughout the consumer’s mortgage journey, AFG’s brokers will research and recommend suitable products, as well as offer support throughout the entire application and settlement process.
“Buying a home is one of the most important decisions that people make in their lives so it’s crucial they do their homework when it comes to choosing the right home loan for them. With data showing the average Australian mortgage is approaching $444,000[i], it doesn’t matter if you’re a first-time buyer, investor or seeking to refinance your property, we recommend consumers seek the advice of an experienced broker who understands your needs and helps you navigate the home loan process,” said comparethemarket.com.au spokesperson Abigail Koch.
The new service gives consumers access to Australia’s widest network of brokers, meaning home hunters in both metropolitan and rural areas will benefit from a personalised service throughout the entire loan process. In the past, borrowers from remote areas have had to travel to major towns to meet with their brokers; something that’s both inconvenient and time-consuming.
AFG’s brokers can also give borrowers credit assistance across its full range of home loans and providers. This means that rather than dealing with numerous lenders, home hunters will have the convenience of only dealing with one broker, who can advise them on the most suitable home loan for their specific needs from their panel of lenders.
“Our service takes the hard work out of shopping around, enabling people to compare products more easily, and only deal with one experienced broker throughout their financial journey, who has knowledge of over a thousand different home loan options,” said Abigail.
Beccy Ras, State Manager, AFG said: “We are seeing an increasing number of borrowers doing their research online and then looking for the simplest and most convenient way of fulfilling their loan requirements. The service comparethemarket.com.au has developed meets both of these requirements.”
Top tips for managing your home loan:
1. Be clear what you want from your home loan and don’t pay for features you don’t need.
When choosing your home loan, draw up a shortlist of potential home loans and list out the additional features. Decide which features you need and which you can do without and then score the home loan based on its suitability to your exact needs. Getting rid of the features that you don’t need could save you 1% on the interest rate of your loan – this amounts to a huge sum of money over the 30 years life of the loan.
2. Check any carrots are not overshadowed by sticks.
Introductory offers can be tempting, but make sure you fully understand how long the honeymoon period will last and what your rate of interest will be once the offer comes to a close. Typically, the variable rate of interest will be higher than that of basic loans so you might end up paying more in the long run. Make sure you check if there are any costs involved in opting-out early.
3. Make fortnightly rather than monthly repayments as you could pay off your home loan more quickly.
Paying fortnightly means you can squeeze in an extra month’s repayment per year. For example, if you made repayments of $1,000 every fortnight of the year (x26), you would pay back $26,000 in one year. If you made repayments of $2,000 every month of the year (x12), then you would only pay back $24,000 in one year.
4. Prepare for rate hike shocks by allowing a 2 per cent buffer when making your mortgage repayments.
Pretend that your mortgage repayments are higher and try and put an extra 2 per cent aside each month. You’ll be ahead of the game when rates rise, and you’ll accumulate interest on this amount. Once rates have risen, try to lift your buffer again by cutting back on luxuries.
5. Don’t forget that you can split to get the best of both worlds.
Many borrowers are torn between variable and fixed home loan rates. “What if interests rates go up or down, am I going to miss out?” is a common question. One compromise is to take out a split loan, which allows you to have part of your loan as fixed and part as variable so you can hedge your bets when it comes to interest rate movements.
6. Consider features such as an offset accounts as another way to save money.
When you take out a home loan, a transaction account will be opened and linked to the loan. The money sitting in this transaction account will be offset daily against your home loan balance, reducing your mortgage interest accordingly. For example, if you had a $300,000 home loan and $25,000 sitting in your transaction account, you will only be charged interest against $275,000.
7. Have someone support you to compare. Make the most of free home loan comparison sites to help you shop around. Comparethemarket.com.au compares 1,350 home loan products from 29 of Australia’s most trusted home loan lenders, and can help you choose the most suitable loan for your specific needs.
[i] AFG Mortgage Index – 4 August 2014 (http://www.afgonline.com.au/wp-content/uploads/2014/08/NATIONAL-August-14.pdf)