Canberra Mortgages

Canberra Mortgages

The nation’s capital struggled during the second half of 2008, but the property market is picking up again in 2009.

If you are looking for a Canberra home loan, talk to a mortgage broker in your area.  We can help you with all types of home loans.

Introductory Home Loans
Sometimes referred to as "honeymoon loans" these loans attract consumers with very low rates, usually the lowest on the market.  Unless your will-power is super human, you will probably find that you are tempted by the low interest rates offered. There are certainly some major benefits to these loans.  The discounted rates apply for a defined period of time, usually six months to one year.  In the beginning of your home loan, your repayments will be low because the interest rate is low.  So for borrowers on a budget who want lower repayments at the start, such as first home buyers, this type of loan fits the bill.  Be aware though, that once the introductory period ends, the rate will revert to a higher rate, usually higher than the standard home loan.  There are usually not many extra features so there may be fees and charges associated for early repayments, therefore any borrowers planning on taking out this type of loan need to consider carefully whether the restrictions placed on the loan, are worth the very low interest rates. Compare home loans otherwise it may end up costing you more long term.

Variable Rate Home Loans
Standard variable home loans usually offer lower interest rates than a fixed rate loan.  But, as the rate is variable, this means that your rate can go up if interest rates rise over the term of your loan.  If interest rates rise, your repayments go up also, meaning that you will be paying more each month to repay the loan.  However, if rates are cut, your interest rate should come down also and your repayments will be lower.  If you have fixed your rate an interest rates fall significantly, you would not be able to reduce your rate and will be paying much higher rates than home owners who are on a variable rate.  Standard variables come with extra benefits such as early repayments, redraw facilities and fortnightly repayments. 

Most lenders also offer a Basic Variable Home Loan.  This is the no frills type of home loan.  Usually offering one of the lowest rates of any home loan, the basic variable home loan come with less benefits than a standard home loan, so you may not be able to make early repayments without being charged a fee.  However, your interest rate is still subject to change, either up or down depending on what the market is doing.



Fixed Rate Home Loans
Usually the rate is fixed for up to five years, and this means that your repayments are always the same.  Usually the fixed rate is around 1 per cent higher than the rate offered on a variable loan, but this could prove very worthwhile if rates start rising and go up by 2 or 3 percent.  But obviously, if rates fall by 1 or two percent, then because your rate is fixed, you will still be repaying your mortgage at a high rate compared to a variable rate mortgage.  The decision over whether to fix your interest rate is a personal choice and really depends on your circumstances, how much flexibility you require, versus how much security you want, and whether you think interest rates are on the way up, or down.


Refinancing Loans
Are you looking to refinance your current mortgage?   You may find that you can save money be refinancing and direct the extra funds into another investment, a family holiday or a new car.  There will be fees for the change so weight up the long term benefits against the costs. Look closely at any exit fees your current lender will charge if you switch loans.  These will vary from minor fees, to major charges in the thousands of dollars. Next, look at any establishment fees on the new loan.  Ensure that the savings of the new loan are not eaten up by costly exit fees.


Construction Home Loans
Construction Loans are designed to help those who wish to design and build their own home, or make major renovations to an existing property.  The loan amount is determined using construction cost estimates, which come from quotes and tenders from builders, as well as council approvals and the amount of work estimated to be carried out by yourself or family and friends.  The lender will then approve the home loan and you access the funds in stages, as each major part of the construction is finished.  You only pay interest on the funds which you have withdrawn, rather than the total loan amount, which offers an affordable way to finance the construction of the property.  Some construction loans will allow you to make small repayments during the construction phase, thereby reducing the principal and interest on the loan.  However, as the rate is variable, your repayments will go up during the construction phase if interest rates rise. 


Still want to talk to someone about your home loan options?  Call and talk to a local mortgage broker today.

 

With interest rates coming down, now is the time to speak to a mortgage broker. We know which banks are dropping rates and who is raising.

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