Basic home loans are a type of loan that trades off flexibility and in return offers a low ongoing interest rate, lower or no ongoing fees and often a reduced or waived application fee.
This type of loan has minimal features and generally doesn’t offer an offset account, repayment holidays, ATM card, cheque book or Bpay. If you are after a simple loan that is easy to use, then the basic home loan would be well suited to you.
Which lenders have basic loans?
The interest rates and fees that can be offered for a basic home loan will vary from lender to lender, however all the major banks offer similar features for their basic loans. Some common basic loan products are:
- CBA– 3 year special rate saver
- Rams- Basic home loan
- Westpac- Flexi first option
- St George- Basic home loan
- Suncorp- Back to basics
- ANZ– Simplicity plus
- NAB– Base variable
- And many more…
Finding the cheapest basic loan
It can be a difficult process to find the cheapest type of loan best suited for you as there are many lenders to choose from. However, there are several things that you need to consider when choosing the right finance to take.
For small loan amounts the fees are more important than the interest rates, so you should check for any hidden fees, particularly ones associated with settlement such as legal fees and settlement attendance fees. You should also look out for any redraw fees that the lender may include in their product. Lastly, if you are a first home buyer, some lenders will be able to waive the application fee.Call us on 1300 889 743 or enquire online, as we have software that can quickly compare offers from over 30 lenders to find you the best deal.
Who is a basic loan suitable for?
Basic loans do not suit all borrowers, in particular they often do not have the same special interest rate discounts for people borrowing over $1,000,000. Simple loans are best suited to:
- Loan amounts that are under $250,000: With a basic loan you can get an interest rate below the standard variable rate even though you don’t qualify for a professional package discount.
- Don’t need bells and whistles: Why pay the annual package fee for a professional package loan if you are not going to use all of the features it can offer, such as a credit card. That way with a basic loan you will only be paying fees for what you need and want, at a lower cost.
- People who don’t want to change banks: Often with other loan types the loan comes as a package with a cheque account and credit card. Obviously if you don’t want to change banks then there is no point in getting these additional products with your loan.
- Simplicity: Anyone who finds dealing with their money to be too complicated and just wants a simple, easy to use solution should apply for a basic loan.
Apply for a basic home loan
Please call us on 1300 889 743 or enquire online if you wish to talk with a mortgage broker who can give you expert advice on basic home loans.