Navigating the mortgage loan market can be a really confusing experience.
There are plenty of numbers and legal issues to consider and that’s before you even get down to choosing a great interest rate.
Once borrowers get to this stage, they’ll often call and ask me about ‘comparison rates’ and whilst it’s always best to speak to a personal broker who can evaluate your situation, I thought I’d give you a brief rundown.
What is a comparison rate?
A comparison rate is a single percentage figure that gives you a more realistic idea of what your loan will cost you. It combines the lender’s interest rate with all the extra charges and additional fees related to that loan.
Lenders are legally required to disclose this rate in their advertising.
How Can it Help Me Choose a Home Loan?
Without guidance from a broker, most people simply compare loans based on the loan interest rate. This can be a mis-guiding practice as they won’t get the full picture of approval fees, establishment fees and other additional costs.
Some loans will have a great interest rate but once those costs are factored in, may be far more expensive than a comparable loan with a slightly higher interest rate.
If you need some help finding the best rate for you, reach out and let’s talk.
My Very Best To You Always,