Choosing a bond is something which needs to be carefully thought through. BetterBond assists you to make the right choice by providing you with information on the factors which influence such an important decision. Take a look at what you need to consider.
Affordability
To ensure that you are able to repay the loan on the purchase of your new home, you will need to take the following into consideration:
- Your after-tax income
- Your current and future monthly expenditure
- Impact of increase in the Prime Lending Rate
We have developed a set of tools and calculators to help you choose a home loan that best meets your needs, including an Affordability and Bond Repayment Calculator.
When using the calculators it is advisable that you use the Prime Lending Rate as a benchmark. You should be in a position to afford repayments at this rate. Consider a 2% rise in the rate and determine your affordability - will you be able to afford an increase in your bond repayments? Click here to use the calculators.
Bond Options
Our experienced consultants are at hand to discuss your specific needs.
When taking up a new home loan key factors have to be considered, including the loan repayment term as well as the type of interest that will apply.
The loan repayment period ranges between 5 and 30 years at 5 year increments, but normally is set at 20 years.
Variable Rate
This is the most conventional interest rate that would apply to most home loans. The rate quoted is linked to the Prime Lending Rate and is subject to the fluctuations of this rate. Your debit order will be adjusted automatically should the rates change.
Fixed Rate
This is the rate contracted between you and the bank for a pre-determined term, 12, 18, or 24 months. A three-month Fixed Rate option is available for those who qualify. The Fixed Rate will appeal to those who wish to fix their home loan repayments without the influence of changes in the Prime Lending Rate, allowing for better budgeting.
Read more about interest rates and the financial impact that it might have on your home loan, buy clicking here.