Understanding interest rates as a first home buyer
It’s essential to understand interest rates when buying your first home and securing a home loan. We’re here to simplify this - you don’t need a maths degree to buy your property!
The rate of interest you pay back each month on the amount you borrow (the “principal”) is calculated by the amount of deposit you put down, and will impact the time it takes to pay back your loan. It’s a good idea to save as much as you can for your deposit, but you will also need to consider interest rates when choosing the right loan.
What are home loan interest rates?
There are a wide variety of loans on the marketplace, but when it comes to interest rates there are three main types of loans:
- Variable-rate loan – The interest rate you pay may vary with movements in market interest rates. It’s a popular type of loan in Australia.
- Fixed loan – Your loan repayments are fixed for a set period, usually one to five years. This makes it easier to budget for repayments and protects you from market fluctuations.
- Split loan – One part of your loan is set, while the remaining portion has a variable rate.
Want a free consultation to help sort out your home loan finances? Give us a call today.
In this chapter
Take the next step to buying your first home.
Intro to interest rates
As you enter the world of home buying, there might be some terms you’re unsure of – this is normal ...
The Reserve Bank of Australia (RBA), cash rate and interest rate – what are they, what do ...
Types of interest rates
When choosing the home loan that’s right for your needs, you’ll need to consider - how you ...
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