One of the first things you’re likely to look at when comparing home loans is the interest rate. While the rate is undoubtedly a very important part of your home loan, there are some other important features that can make a big difference and even save you money over time.
Here are just some of the features that can mean the difference between a good and a great home loan.
1. Flexible repayments
Do you want to be able to manage how frequently you make repayments? The capacity to choose how often you repay (weekly, fortnightly or monthly) means you can match your repayments to your pay cycle, which can help give you greater control of your finances.
2. Additional repayments
At some point throughout the life of your home loan you may find yourself coming into some unexpected money. Being able to put this money towards your home loan on top of your regular scheduled payments can help you save on interest and ultimately pay off your home loan faster.
3. Redraw facility
Some home loans let you not only make additional repayments but also redraw these repayments should you need the cash. This can serve two purposes – it can reduce your interest repayments (the lower your outstanding debt, the less interest you’ll have to pay) while also providing you with a ready reserve of funds if you need them at some point in the future.
4. Repayment holiday
A repayment holiday is a break from making your home loan repayments for those occasions where you may need to direct your cash elsewhere – perhaps because your partner is going on parental leave, for example, and you’re moving from a double to a single-income household for an extended period.
There may be some conditions around this; with CommBank, for example, you may be able to take a repayment holiday of between 3-12 months if you’ve made enough additional repayments.
5. Offset account
Typically, an offset account is a transaction account linked to your home loan into which you can get funds paid and use for your daily expenses. The difference between this and a regular transaction account is that any money you carry in the account is offset against your home loan balance, so you can pay less interest on your home loan while still having easy access to your money.
6. Access online and on the go
Being able to find out what you need to know, and when you need to know it, is one of the great drawcards of the internet age. And when it comes to your home loan, the ability to check your balance or make changes when you need to through an application on your phone – like the CommBank app, for instance – can save you a lot of time and hassle.