2.99% interest rate is that real? What's the catch?

Any general questions you might have in regards to loans and finance.
Heck
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Joined: Wed Jul 17, 2019 5:39 pm

2.99% interest rate is that real? What's the catch?

Postby Heck » Wed Jul 17, 2019 5:41 pm

I’m looking to refinance my home loan to get a better rate and came across 2.99% from Greater Bank. It’s a 1 year fixed rate loan. This sounds like a great deal. What’s the catch here? Am I missing something?

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Otto Dargan
Mortgage Specialist
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Location: Sydney, Australia
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Re: 2.99% interest rate is that real? What's the catch?

Postby Otto Dargan » Wed Jul 17, 2019 6:18 pm

Hello Heck. Welcome to the forums.

Greater Bank’s 1 year fixed rate home loan reverts to 4.35% p.a. after the introductory/honeymoon period. Compare that with a 3.44% p.a. variable rate home loan, a loan comparison shows that on a $1.2 million loan, you’re saving $204,871 in interest with the variable rate home loan even using Greater Bank’s own loan comparison calculator.

  • This is similar to a bait & switch rate.
  • Sticking to a low upfront & transparent rate has long term savings.
  • Cheap can mean nasty (low cost, low value).
  • Variable loan offers offset and redraw facilities to save further interest & offer flexibility with banking.
  • Larger banks may be less susceptible to future rate fluctuations.



You can check out the best interest rates on offer from our panel of lenders. However, there is more to a home loan than just the interest rates.

Give us a call on 1300 889 743 or fill in our free assessment form to get the best deal on your home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Heck
Posts: 2
Joined: Wed Jul 17, 2019 5:39 pm

Re: 2.99% interest rate is that real? What's the catch?

Postby Heck » Wed Jul 17, 2019 6:30 pm

Okay. How do I find out the true cost of a home loan? Do you mean the comparison rate?

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Otto Dargan
Mortgage Specialist
Posts: 7600
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: 2.99% interest rate is that real? What's the catch?

Postby Otto Dargan » Wed Jul 17, 2019 7:06 pm

Hi Heck,

Banks and lenders are required by law to display a comparison rate when advertising any home loan interest rates. This is intended to show any hidden costs that wouldn’t normally be disclosed. It takes into account credit fees, loan application fees, recurring fees and other costs.

The calculations don’t include:
Here are some tips and a comparison rate calculator to help you figure out the true cost of your home loan and to work out how much you’re actually paying over the life of the loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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