Your Interest rate is one of the biggest hurdles you will face if you want to pay down your home loan quicker. Each repayment amount and the total cost of your loan depends on whether your Lender is looking after you or not. So making sure you are on top of your current rate, as well as the interest rate competition across the market, is essential.

By knowing and understanding your interest rate, you can make educated choices about the home loan that best suits you. Whether this is your first-time home loan as a First Home buyer or getting a better rate by refinancing your current home loan.

Interest rate percentages are based on a number of factors – the Reserve Bank as you have seen recently in the media, the cost of money on overseas markets, and the general state of the economy, including inflation. Interest rates don’t appear to move by much when looked at as a simple number, sometimes only a fraction of a percent, but each fraction of a percentage or basis point, makes a significant difference to the total cost of a loan, especially over the whole term of the loan, and makes a big difference when you’re working to pay down your mortgage faster than the total term of the home loan i.e., 25-30 years.

When you first lock in a home loan, you’ll have some decisions to make. Whether to choose a fixed or variable interest rate, along with maybe an interest only period, this could be for a construction loan or an investment home loan, it could be a package with an offset, or redraw or just a basic loan with no bells and whistles.

Choosing a fixed rate ensures that the interest rate does not change over a set period of time, and your repayments will be predictable, allowing you to budget more effectively, having the security that your repayments will remain the same over this period. Whereas a variable interest rate will fluctuate up or down increasing or decreasing your repayments due to market pressures. Regarding the best loan for your specific requirements, Home Loan Advice from your trusted Gold Coast Mortgage Broker will help to take the guess work out of getting the right home loan for you.

You can use Interest rate calculators to compare rates across fixed and variable loans, and see how interest rate changes would affect you financially both monthly and the overall cost over the length of the Home Loan.

The best way to keep on top of interest rates is to contact Home Loan Advice and speak with your friendly local Gold Coast Mortgage Broker to compare the Home Loan market for you.