Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.
Are you looking for the cheapest home loan in Australia? Our experienced brokers can help you compare cheap mortgages from different Aussie lenders. Whether you’re a first time home buyer or an investor, we can help you find a loan that suits your borrowing needs. Apply with us today to secure the cheapest home loanwith the features you need, the best repayments and fees.
Where To Find The Cheapest Home Loan?
At Break Free Home Loans we can connect you to:
- Australia’s big banks such as Commonwealth, Westpac, NAB and ANZ
- Online lenders
- Fintechs and neobanks
- Small lenders including local credit unions and customer-owned banks
What Are The Cheapest Home Loans In Melbourne?
- Fixed home loans: Fixed rate home loans allow borrowers to lock in interest rates for the loan period. Regardless of any change in RBA cash rate or the lender’s variable rates, your repayments will stay the same over the course of the fixed term. This allows you to hedge against future rises.
- Variable home loans: Variable home loan interest rates will fluctuate according to the lenders and the market. This makes your repayments vary. Variable loans tend to have more features than fixed rate loans, though interest rates are often higher.
- Split rate home loans: A split rate home loan allows a customer to pay a fixed rate on part of their home loan term and a variable rate for the rest.
- Principal & interest loans: Cheaper home loans are usually available for principal and interest loans compared to interest only repayments. This is because the loan repayment on a principal and interest mortgage accounts for the outstanding debt. If you’re only paying interest but the loan amount remains unpaid, your debt is not reduced. This poses a greater risk for the lender if you suddenly can’t meet your repayments and decide to default.
- Interest-only home loans: The borrower only needs to pay back the interest on the loan for the first few years, before the loan reverts to principal and interest repayments. This leads to lower repayments in the short term, but interest-only loans tend to be more expensive in the long run.
What To Consider When Determining The Cost Of Home Loan?
The interest rate of your home loan will determine its affordability.
Variable Home Loans
When you choose variable home loans, your repayments will fluctuate according to the market rate. When interest rates are high, you will end up paying more, but you may also take advantage of the bottom of the market rate. It’s usually more difficult to budget with variable repayments.
Fixed Home Loans
Fixed home loans allow your repayments to stay the same over the life of the loan. This makes for more manageable repayments. However, fixed home loans tend not to offer as many features compared to variable loans.
Deposit Size / LVR
Lenders will view you as lower risk when you save a bigger deposit or build up some equity in your home. In fact, when you save up a 20% deposit and have an LVR of 80%, you can avoid costly Lenders Mortgage Insurance. LMI is additional insurance paid to the lender to protect them at the risk you’ll default.
Cheap Home Loans For Different Categories In Melbourne
How Much Can You Borrow?
How To Get Cheap Mortgages?
Finance providers will be more likely to lend you money if you have a good credit history. If you don’t have any credit history, try to get a credit card and use it responsibly. They will check if you have any missed payments or defaults to see if you can manage credit responsibly.
If you can’t get a loan on your own, try finding someone who is willing to act as a guarantor or co-sign for you. This could be a parent, grandparent, or other family member. Keep in mind that whoever co-signs or guarantees the loan will be responsible for it if you can’t make the payments.
Home loan lenders will check your employment history to make sure you have a stable income.
Lenders like stability. They want to see that you have been in continuous employment for at least 6 months. They will look at your current asset position and may require a larger deposit if you have limited assets.
Have Any Questions?
Frequently Asked Questions
Which Bank Provides The Cheapest Home Loan?
The answer to this question depends on a few factors, including the type of home loan you are looking for and the current market conditions. It’s always a good idea to compare different home loan offers from a variety of lenders before making a decision.
Which Home Loans in Melbourne Are Cheapest?
The second thing to consider is the fees and charges associated with the loan. Home loans often come with a range of fees, including application fees, origination fees, and closing costs. Make sure you understand all the fees before you apply for a loan so there are no surprises down the road.
Finally, you’ll want to consider the terms of the loan. Home loans typically have terms of 15 to 30 years. You’ll need to decide how long you want to be paying off the loan and make sure the terms are agreeable.
How To Get Cheap Mortgage In Melbourne?
You can lower your LTV by either saving up a larger deposit or finding a guarantor for your loan. When you co-sign your loan with a guarantor, lenders will see you as a lower-risk borrower. However keep in mind if you default or fail to make your repayments, the guarantor will be responsible for the loan. This may strain your relationship with them so you have to be confident you can repay the loan.