Home Loan Interest Rates and Fees!
It is important to compare the rate of interest each bank or financial institution is offering you as this can make a big difference over the course of a 25 or 30 year loan.
There are some fees that you may find apply to your home loan, here are some of the most commonly used ones:
Account keeping fee
The account-keeping fee is a service charge by the lenders that is often paid monthly to cover the costs of administration during the loan period. On some accounts it might be called a service fee.
You may find some lenders charge you an annual fee in preference to a monthly account-keeping fee. Annual fees might also cover costs such as a ‘package loan’ where several deposit and credit accounts are packaged together with your home loan under one administration or administrative cost.
It you have a redraw facility added into your home loan where you are able to redraw some or even all of your payments to your home loan in advance you may find a fee associated with this feature.
Other fees may include a loan application fee, a valuation fee from the time of the purchase of the house, a late payment fee if you miss a repayment date or a discharge fee if your loan is paid early.
Before signing your home loan you should ask your lender to explain in detail all the fees that will apply to your home loan.
What is the cost of a NZ Home Loan?
More important than the interest rate, is the rate you pay it off.
This is why I wrote my Book “Is your money managing you?”. Even an extra $100 a month can make a massive difference.