What Is the Best Interest Rate for a Home Loan?
The best interest rate for a mortgage sits as low as 1.94%. From there, the interest rates go up. In Australia, most mortgage interest rates range from 2% to 5%. Conventional mortgages provide the best loan terms. Since they require a 20% deposit and full financial documentation, the applicant poses the least amount of risk for the lender. In the 2000s, lenders developed alternative options to the conventional mortgage after noticing that homebuyers had a tougher time qualifying for them.
Alternative mortgages include:
- Low doc loan
- Bad credit
- Family pledge
Within each mortgage sub-category, homebuyers will find at least one that has the best rate. Then, the rates increase.
For example, the lowest rate mortgages from Mortgage House include:
- Chameleon Freedom Home Loan at 1.98%
- Essential Low Rate Home Loan 80 at 2.19%
- Affordable First Home Buyer Special at 2.29%
To obtain the best mortgage rates, homebuyers must complete some homework before applying. Those who improve their credit score, gather their financial documentation and lower their expenses help their cause. Saving enough for a 20% deposit and paying down outstanding debts helps too.
The point is to become financially viable and less risky for lenders. After all, the average mortgage amount borrowed by Australians continues climbing. That’s more debt that homebuyers must repay. Over 30 years, anything can happen. Plus, refinance home loan is an option down the road too.
Best Interest Rate and Mortgages Conclusion
Each mortgage type has the best interest rate in its category. To dig further into the details, contact our Mortgage House loan specialists today.