However, savvy buyers are always looking for further opportunities to maximise their return on investment and have turned to home loan interest rates as an avenue to reduce costs.
“Preferential interest rates such as these can be achieved by ‘priming’ one’s financial profile prior to applying for a home loan,” said Rhys Dyer, CEO of Ooba Group.“In the case of home loans, different customers receive different interest rates based on their individual financial risk profile. It all depends on what the bank is willing to offer, and how much of a risk they consider you to be,” Dyer said.
Homebuyers need to decide between a fixed or a variable interest rate on their loan. Dyer believes that this choice comes down to preference and a buyer’s appetite for risk: “With variable interest rates, when the prime interest rate goes down, so do your monthly home loan repayments and vice-versa. Ultimately, a buyer’s interest rate is determined by their ability to prove their financial stability to the banks, and one of the most effective ways to do this is by getting prequalified before applying.Prequalification is a certificate that buyers can obtain using a free bond indicator tool or by speaking to a home loan expert.