Basic home loans are a type of loan that offer very little flexibility and in return offer a lower ongoing interest rate, lower or no ongoing fees and often a reduced or nil application fee.
The basic home loan has minimal features and normally wouldn’t come with an offset account, repayment holidays, fee free bank account, cheque book or redraw below a certain amount. A simple loan that is easy to use, then the basic home loan would be well suited to you.
Is the Interest rate important? Finding the cheapest basic home loan best suited for you can be difficult, as there are many lenders to choose from. However, there are several things that you need to consider when choosing the right home loan.
For loan amounts below $200,000 the fees and charges can be more important than the interest rate, you should check for any hidden fees, particularly those associated with settlement, such as legal and settlement attendance fees, LMI processing fee or Guarantor fee. You should also be on the lookout for any redraw fees that may apply if you want to redraw below the minimum redraw amount or manually redraw at a lender branch.
Is a basic home loan suitable for you? Basic home loans do not suit all types of borrowers, specifically they do not as a rule offer the same special interest rate discounts for people borrowing over $200,000, they are most suitable for:
Loan amounts below $200,000: With a basic home loan you can get an interest rate below the standard variable rate even though you don’t meet the banks requirements for a professional package discount.
Don’t need the whole box & dice: 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 home loan you will only be paying fees for what you need and want.
Keeping it simple: If you find dealing with your money or bank to be too complicated and just want a simple, no fuss solution for your home loan, then more than likely a basic home loan is the loan for you.
The basic home loan has minimal features and normally wouldn’t come with an offset account, repayment holidays, fee free bank account, cheque book or redraw below a certain amount. A simple loan that is easy to use, then the basic home loan would be well suited to you.
Is the Interest rate important? Finding the cheapest basic home loan best suited for you can be difficult, as there are many lenders to choose from. However, there are several things that you need to consider when choosing the right home loan.
For loan amounts below $200,000 the fees and charges can be more important than the interest rate, you should check for any hidden fees, particularly those associated with settlement, such as legal and settlement attendance fees, LMI processing fee or Guarantor fee. You should also be on the lookout for any redraw fees that may apply if you want to redraw below the minimum redraw amount or manually redraw at a lender branch.
Is a basic home loan suitable for you? Basic home loans do not suit all types of borrowers, specifically they do not as a rule offer the same special interest rate discounts for people borrowing over $200,000, they are most suitable for:
Loan amounts below $200,000: With a basic home loan you can get an interest rate below the standard variable rate even though you don’t meet the banks requirements for a professional package discount.
Don’t need the whole box & dice: 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 home loan you will only be paying fees for what you need and want.
Keeping it simple: If you find dealing with your money or bank to be too complicated and just want a simple, no fuss solution for your home loan, then more than likely a basic home loan is the loan for you.
