Everybody wants to spend very little for our mortgage as you can, but it could be wrong to believe that lower-rate products are automatically better.
In some ways, 房屋貸款 is like a meal or a car or a couple of shoes – the lowest priced isn’t always the best.
Listed below are five reasons why the product with the lowest rate might not be all it’s cracked approximately be.
The best rate may not be the smallest rate
Lenders prefer to entice customers as to what is called a ‘honeymoon rate’ – an artificially low rate that soon reverts on the higher ‘real’ rate.
For example, a lender might provide a discount of .50 percentage points to lure within the borrower, but move these people to the true rate half a year in the mortgage.
Another reason the headline monthly interest may be misleading is that you simply could find yourself paying far more than you expected once fees and charges happen to be added on.
That’s why borrowers should check not simply the headline rate but the ‘comparison rate’, which incorporates fees and expenses. Sometimes, the comparison rate can be over 1 percentage point greater than the headline rate.
Ultra-low mortgage goods are often no-frills products, so even if they really are as cheap because they look, they could be missing desirable features.
For instance, you might want usage of an offset account or redraw facility, or you may want the option for temporarily reducing or freezing your repayments – all of these could be absent.
As a result, you may be more satisfied choosing a mortgage that features a higher rate but provides more control.
One other reason some lenders can offer 56dexkpky rates that are low is because don’t need to fund expensive branch networks – either simply because they have just a couple of branches or because they’re online-only operations.
But what if you want the security of always developing a branch readily available? In that case, you may want to choose an alternative lender, even though it means paying a little more.
Ultra-low variable rates are all well and good, but imagine if you expect 房貸 to increase or you need certainty to help you better manage your finances?