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Managing your loan

How to weigh up home loan 'perks'

Roisin Broderick, Content Specialist, Keystart

01 May 2019 • 1 min 30 secs
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Interest rates

When you are considering refinancing options or even if you are looking at your first home loan, the interest rate attached to the loan can be offered as a discount or special rate.

Sometimes the rate is packaged up with other benefits too.

It is important to be clear exactly how the lender’s interest rate will be applied.

Some useful questions to ask would be:

  • What is the exact rate that will apply to my situation, my loan?
  • Can you tell me how much my repayments would be?
  • Does that rate apply for a limited time? Is it a discounted rate that applies for the first year only?

You can compare Keystart’s interest rates here. Keep in mind that Keystart’s program is designed to help people get in to home ownership earlier by lowering the upfront costs rather than offering the lowest interest rate on the market.

You may find it useful to use Canstar’s honeymoon loan calculator to see how a honeymoon rate works. 

Benefits beyond the loan

Some lenders may be able to offer other benefits with a home loan, almost as a package. This may include credit cards, insurance discounts and offset accounts. Be sure to check all the conditions on these benefits and weigh up against your requirements.

Check carefully if any benefits come with a limited time, for example, a new credit card with a lower rate that may be offered for the first twelve months.

Costs of the new loan

Be sure to gather all the information on any fees and charges with the new loan. All lenders will be able to provide you with all the fees and charges associated with a home loan. Read more about the  true costs of a home loan.

The pros and cons

Doing your research into the benefits of different home loan products will assist you in making a balanced decision. Each option may have its pros and cons. You will need to weigh up what works best for you in your own situation.

Keystart recommends that you seek your own independent financial advice prior to making any decisions about your financial needs. Any examples given in this post are provided for illustrative purposes only.