The Australian Competition and Consumer Commission (ACCC) is currently working with lenders to understand their fees and charges and how they weigh profitability against consumer interests, particularly in light of the fact that they increase interest rates when the RBA keeps official rates on hold.
While the banks need to, and should, make a profit, because after all, they are businesses, this investigation by the ACCC is part of the Government’s wider interest in how the cost of mortgages impacts home affordability.
The findings will be shared next year. This is good news, but in the meantime, how do you make sure you get the best interest rate?
The answer is surprisingly less complex than you think: Engage a mortgage broker.
While loan calculators and mortgage comparison websites are good tools for research, a mortgage broker will actually take into account your individual circumstances and how you intend to manage your finances over the long term.
For example, right now, with uncertainty over rate rises many people want to lock in a fixed interest rate. This makes sense. But some fixed rate loans don’t allow you to pay more off your mortgage when you want to and have the capacity.
Some fixed home loan rates will be capped – meaning you can only put part of your mortgage in a fixed loan. The devil, they say, is in the detail.
A mortgage broker’s services are free for borrowers, and a broker will work with you in two important ways:
- To understand your finances
- To educate you on how to make good headway on your mortgage – this will result in you paying less interest over the term of the loan, help your build up equity that you can eventually tap into to expand your portfolio, and, ensure you have a loan that allows you to access cash when you need it, if some large unforeseen expenditure hits. All of these things combined add up to one important factor: you are not just ‘paying off your mortgage’, you’re making the investment in your home to work for you.
Many Aussies are still ‘brand’ buyers – that is, they don’t think beyond the ‘Big 4’ but there are many smaller lenders offering better deals, lower fees and friendlier terms, and you won’t necessarily be able to make a straight forward ‘apples with apples’ comparison with loans in an online comparison site, without delving deep into the jargon. But a broker knows this stuff. It’s his/her job to have this knowledge and to share it with you, the borrower, when appropriate to your needs.
So if you want the best deal, talk to a broker, talk to us.