Having a home loan with the lowest interest rate is preferrable, it means we will pay less back to our lender. But is it always the best fit for our particular circumstance?
I have just come back from my meeting with my mortgage broker. We have had a frank discussion about my circumstance’s and the way I feel about my current “Line Of Credit” lender. The upshot is, it is time to move on.
My broker originally suggested no less than twelve suitable products and lenders. Going though the details, features and benefits of each product took us about 15 minutes. We have narrowed it down to 3.
The table below sets out the details of each as at 11/11/2008. I use my Line of Credit for Investment, so no comparison rates are quoted.
Lender:……………Colonial……..ANZ………..RAMS
Product:..Line Of Credit..Equity Manager…Line of Credit Pro Pack2
Rate at 11/11/08:…7.79%……..8.32%……….7.49%
App Fee:……………….$600……….$600………….$600
Reg Fees:……………..$12 pmth…..$150 pyr……..$300 pyr
Split Acc’s:……………..Yes…………Yes…………….Yes
Credit Card:…………….Yes………..Yes……………..Yes
Cheque Acc…………….Yes………..Yes………………Yes
Internet Banking:………Yes………..Yes………………Yes
Interest Only:…………..Yes…………Yes………………Yes
As you can see there is quite a difference in current interest charged and yearly fees. I currently favour the Colonial Product, but my broker is leaning me toward the ANZ. He feels the ANZ product offering is much more clearly defined. A higher rate yes, but ultimately easier to manage. This is his opinion, and my circumstances will be vastly different to many. The important thing here, is that I have complete confidence in my broker. I think I am going to go with his recommendation.
Lowest rate is not always best! But don’t take my word for it, contact a reputable broker and have a chat. They are a lot like the old fashioned Bank Manager. They want to help and they want your ongoing custom.