A home loan is the percentage of money that you borrow from a bank or a lender for the sole purpose of buying a house. Typically, but not usually, it is not less than almost 95 percent of the total value of the house. The bank or lender lends the home loan in exchange for paying extra money, which is commonly known as ‘interest’ on the home loan money. The house is used as a security bond by the lender or the bank to make sure that you will pay back the money you borrowed in full over the given period of time at a mutually fixed interest rate. It means you must agree for the bank or the lender to repossess the house if you fail to pay them back the home loan. The bank or lender usually has a twenty- or thirty-year return policy in which you must at all costs repay them. This condition is beneficial for both parties as to the borrower the afford to pay back the loan sustainably over time, and the lender benefits from this as the amount of interest maximises with time. The same policy exists in Australia, although Australian interest rates are the lowest in history. You can compare home loan rates through several websites as well.
The extra money that you pay to the lender or the bank in the form of interest is, in essence, the price that you have to pay to get the money that you need for possessing a house. Bankers and lenders take advantage of the fact that people don’t have the full purchase amount of the house, and thus they offer interest rates for ‘selling money’ to people.
The low fixed interest rate home loans in Australia have increased in 2020 and 2021 by a number that is less than 2%. This is an unprecedented number in the entire history of Australia. This is extremely cheap when compared with the interest on home loans in other countries. Therefore, these low rates have become the center of advertising and media attention.
If one looks back into the history of interest in home loans in Australia, the only times when the big four banks increased their rates was when they sensed danger and instability on the horizon. That being said, the housing market in Australia has been increasing to more than 12% for the past 18 months, but that is only the result of COVID-19 affecting our lives.
Although comparing home loan rates in Australia might look like a time-consuming task, but to tell you the truth, the power of the internet has made it a lot easier. With online websites, you can easily compare home loans in Australia. In fact, Aussies can easily get started in less than 60 seconds. All you need to do is to visit MakesCents which is completely free and obligation-free. All you need to do is to enter your details on the website, find out whether you qualify or not and then wait to receive a phone call to start the process.