Comparing all the lenders on my panel who offer a basic variable rate loan, there is a variance of 2.26% across lenders who offer a basic variable rate product. On a $400,000 loan, this would cost you $9040 per annum.
Most lenders offer multiple products, if you don’t ask for the right one, you may be paying substantially higher than you should. All that hard work finding the most suitable property could be wasted in a few short years by not securing the right finance, and paying way over the odds.
This price differential between best and worst doesn’t just apply to variable rates. When I reviewed 3 year fixed rates, I found a price difference of 1.95% between the cheapest and most expensive.
Now don’t get me wrong, sometimes cheapest isn’t the best. Many people are prepared to pay a little higher to make sure they secure a loan, or get an offset account, or get the ability to make extra repayments on a fixed rate loan. Completely understandable.
But whatever you do – don’t just go to the same old bank you have always used. Check with a broker and find out what other options may be possible.
For a no obligation checkup – call me, Nick Barr – First National’s in-house mortgage broker on 0418 311 019.