Over and above securing the actual capital finance for a new property purchase, it is important to understand the range of interest rates banks are presently financing at and how the personal aspects of your application can affect the interest rate offered on your home loan.
Some important factors that would influence the pricing decisions include:
- loan to value percentages,
- location and physical grading of the property purchase,
- personal credit score ratings,
- borrower types [ for example self employed verses full time employed],
- property types [ vacant land or building loans verses completely built property structures],
- and finance affordability
All of these factors are compiled to determine an interest rate suitable for both the lender and borrower.
The only instance you will receive an interest rate indication is by submitting an official home loan application accompanied by a signed sale agreement for a new property purchase. The banks are only then able to assess the application holistically, including the physical inspection of the property which is an integral part of pricing a home loan offering.
The current prime base rate is 9% and this has remained unchanged since November 2010. Prior to that particular financial period, home buyers could expect to receive discounts as low as 2% below the prime rate. Presently, we typically find that these low discounted rates are offered to those staff members permanently employed by the banks, who receive a fringe benefit on all financial products offered by the bank they work for.
For repeat and second time home investors, it may sometimes be expected that the previous lower priced concessions would automatically be carried over to the new registered home loan. This pricing method would not apply, as the banks are now pricing each new application on a new pricing module, where the older pricing system will not be considered for the new and revised home loan agreement. A complete new quote is calculated and issued based on the bank’s revised pricing structures.
The best way to ensure you receive a preferential interest rate concession for your new home loan is to apply through a mortgage originator who would scout the market and motivate for lower priced mortgage rates at no additional cost to you.
Give us a call on 086 111 1563 to find out more.