Find out the true cost of your home loan’s fees and interest with Savvy’s home loan comparison rate calculator
Securing a great rate on your home loan is crucial, but it’s just as important to know about the cost of its fees. Use Savvy’s comparison rate calculator to calculate how much home loan fees will add up to over the years. Unlock the secrets of home loan interest comparison rates with our simple calculator today.
The comparison rate calculator needs just a few inputs from you to be able to calculate the comparison rate of your loan. First of all, enter your loan amount and term in years. If you have an introductory interest rate on your loan, add this in alongside its term length.
Next, enter the revert interest rate which applies to your loan and the upfront fees plus any ongoing fees which your lender may charge. Use the green arrow to change the payment frequency of any ongoing fees from monthly to quarterly, half-yearly or annually. Click anywhere on the home loan comparison rate calculator to see your results.
You can use the interest comparison calculator to see what your monthly repayments will be when different interest rates are applied. You’ll also be able to see how much the loan fees will add up to over the life of the loan, as well as the total interest payable.
Fees that are charged for home loans fall into three basic categories, as seen in our calculator:
Also called loan application fees or establishment fees, upfront fees are charged when you first set up your loan and cover the lender’s costs to establish and register the mortgage. They range from $200 to $700.
Ongoing fees have a range of names: account keeping fees, monthly service fees and annual fees are all included in this category. Monthly service fees range from $5 to $25, whereas annual fees are generally between $250 and $600.
Commonly known as closing or discharge fees, these are applied at the conclusion of your home loan when you’re ready to close out your account. Similarly, these can vary in cost from $150 up to around $400.
Additional fees which may also be applied, but not included in comparison rate calculations, are:
Yes – Part 10 of the National Credit Code requires all credit providers to display a comparison interest rate, expressed as an annual percentage rate. The comparison rate is based on a $150,000 loan taken out over a 25-year term. All relevant fees are added to the loan so consumers can see the true cost of the loan.
A loan’s comparison rate is the most accurate way to compare loans, but it doesn’t account for government fees (such as stamp duty or mortgage registration fees) or additional charges that are only charged in certain circumstances.
The comparison rate ensures that lenders can’t advertise a low interest rate, only to charge excessive fees which bump up the overall cost of the loan. For example, a lender could advertise an interest rate of 1.99% p.a., but charge an annual $400 loan package fee, plus $25 a month account keeping fees. This could make the loan more expensive overall than another loan with an interest rate of 2.20% but no administration, annual or account keeping fees.
Savvy compares the comparison rates of home loans and presents those comparisons side-by-side so you can clearly see which home loan is the right one for you. Comparing offers helps you make a more informed and accurate decision on which home loan is the best and most affordable. Savvy’s comparisons are free, and a quick quote will not be registered on your credit file.
The more deposit you’re able to offer, the lower the comparison rates which become available to you. Some of the lowest interest rates available in Australia are only available if you offer more than 30% or 40% deposit in relation to the cost of the property you wish to purchase.
The better your credit score, the more chance you have of lenders offering you their lowest rates, as these are usually reserved for premium, low-risk clients. Your credit score doesn’t have to be perfect, but the better the score, the better your chances of a low rate. It’s always a good idea to check your credit score before applying for a loan, and get rid of any unused lines of credit or credit cards.
Your credit score will be maximised if you are in the same job for a considerable period, which indicates stability of employment. Changing jobs just before you apply for a new loan is not a good idea, as some lenders stipulate you must have been in the same job for at least three to six months to be accepted for a home loan.
Your chances of being offered a low comparison rate are increased if you apply for a loan and offer a family member as a guarantor for your loan. Your guarantor will have to be prepared to submit their financial details to your lender and should be in a strong financial position with home equity behind them.
In a highly competitive home loan market, many lenders are now offering very low fees or even no application fee loans. Take advantage of these low-cost options to keep the overall cost of your home loan down. While some lenders require a deposit higher than 20% of the total purchase price to qualify for these low-fee loans, other lenders offer them for loans with the standard 20% deposit.