 Seduced by clever features
With rate rises imminent lenders will be trying to seduce borrowers with fancy loan features, but experts warn home owners to compare loans carefully.
The financial comparison website RateCity is urging borrowers to read the fine print before signing anything and to not be "fooled by gimmicks".
"When interest rates are on the upswing like they are now, lenders will start to introduce home loans with savvy new features to attract customers.
"But Australians should always compare home loans to make sure they offer all of the features that you need," said RateCity CEO Damian Smith.
"We expect to see more creative marketing by lenders in the coming months as variable rates and the cash rate starts to rise," said Mr Smith.
While interest rates remain at low levels, and official rates have been left unchanged by the Reserve bank for several consecutive months, economists agree that rates will rise by the start of 2010.
Australian banks are likely to lift home loan rates before the cash rate is changed, due to increased funding pressure. This means homeowners may be assessing their budgets as early as December 2009.
Economists have changed their minds on the October rate rise, because of poor jobs data. However, most economists are still confident we will see a small rate rise before the end of the year.
With pending interest rate rises, homeowners are being advised to check their mortgage carefully to ensure they have the best deal.
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