Ask Resi

Question:
My eldest daughter and her husband are about to buy their first home. They’re in their mid-20’s, and financially prepared to make the purchase with a deposit of more than 20%, but they don’t know whether or not to take out a loan with a low rate or one that has
a redraw facility. I know there are deals on the market for first home
buyers, so in the current environment, what should they be considering?

Answer:
It’s not so much the current environment that will dictate what they should do, but more so their future plans around their family, such as, expected length of stay in their home and whether they intend to start a family. Having an idea of what future plans they have for the
property will affect what type of loan they take out. A ow interest rate is just as important to consider as lexibility and low fees.

Here are some things to think about:

Choose the right lender and loan package:
It’s not always about the rate, focus on how you an pay off the loan as quickly as possible and educe overall interest.

Low introductory rate for 12 or 24 months:
Making sure the loan has the flexibility to make xtra repayments in the introductory period is mportant to help get ahead with the loan.
Make sure your variable interest rate is ompetitive: Check and compare comparison ates to see the true cost of the loan (inclusion of fes and interest rate). The lower the rate the lower oerall cost to you. Low interest home loans: Keeping your eye open for competitive low rates is important, as are features like extra repayments, redraw, portability, 24/7 access and low fees.

Our Suggestion:
They should start looking for a loan which has a competitive rate and options to operate the loan easily and efficiently for the next three to five years. Keep an open mind, weigh up the options and shop around from a range of lenders. When comparing different loan
deals, be sure to look at loan features, as well as the interest rates.