How to get a home loan in Australia for first home buyer
First home buyers for example don’t have to have a 20 per cent deposit, you can still have a 5 per cent deposit, that’s still available, investors, 10 per cent deposit, we’ve now got banks going back to 90 per cent loans to investors, on an interest only basis.
While some lenders offer loans with a small deposit, if it’s less than 20 per cent, a borrower will be up for lenders mortgage insurance, which protects the lender, in case a borrower defaults.
A lower deposit, can mean a higher mortgage rate, depending on the type of loan you take.
Principal and interest loans means your repayments cover the interest charged and reduces your loan over the term of the loan.
Interest only, only covers the interest, usually for a period of 5 to 10 years.
Variable rates can change, if the cost the lenders incur to provide the loan, like wholesale costs or the official cash rate set by the Reserve Bank, moves. Fixed rates remain unchanged for an agreed period.
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