Comparing home loan rates: Things to consider about your future

You want to buy a house. That’s great! But before you dive into the world of house hunting, submitting offers and everything else that comes with buying a home, there are a few key factors you should think about.

In this blog, we’re breaking down some of the main things to consider when buying a house. 

When should I buy a house?

There aren’t any hard and fast rules around when the best time to buy a house is. Instead, it really comes down to your current circumstances and preferences. 

Buying a house is one of the biggest decisions you’ll ever make, so it’s important to ensure you’re ready for this significant commitment. If you’re struggling to decide whether now’s the time or if you should wait, we’ve pulled together 5 key factors to consider.

Economic conditions

When it comes to the current economic conditions, there are a couple of points to keep in mind. Firstly, you’ll want to keep an eye on the Reserve Bank of Australia's (RBA) official cash rate. Ultimately, lower interest rates can make borrowing cheaper and vice versa. 

Next, check out property price trends in the areas you’re interested in. Are prices rising, falling or stable? For instance, if the market is tracking up and prices are increasing, it could be worth getting into the market sooner rather than later to try and beat the price hikes. Alternatively, if property prices are on their way down, you could be better off holding off to take advantage of lower prices. 

Personal finances

Your personal finances play an important role in determining when the best time to buy is. Before you even think about looking to buy, you’ll need to make sure you’ve got enough savings behind you to cover a deposit. Ideally, you should have enough saved for a 20% deposit, along with the other additional costs like stamp duty, conveyancing and moving costs.

Not to mention, it also helps to have a steady income and a good credit score before buying.

Property market

In Australia, the property market can be seasonal. Spring and summer tend to have more listings and competition, while autumn and winter may offer fewer choices but less competition.

With that said, the market is also cyclical, which can favour either buyers or sellers. In a buyer's market, there’s more supply than demand, which often presents more opportunities for negotiation. Alternatively, in a seller's market where there’s more demand than supply, you’ll often be up against more competition, which can drive up property prices. 

Government incentives

If you’re a first-time home buyer, you might be able to take advantage of some of the government grants and incentives that are currently available. These programs are designed to help eligible first-home buyers get into the property market. From the First Home Owner Grant (FHOG) to the Home Guarantee Scheme (HGS) and even stamp duty concessions, it’s worth doing your research if you can save a few dollars.

This content has been created for educational purposes only. Unloan may not provide all features discussed. Visit our product page here to learn more about our home loan features. 

Long-term goals

Lastly, be sure to consider your long-term plans. Are you planning to stay in the area for the next few years? Are you hoping to build your property portfolio or start a family? It’s important to consider whether buying a home will help you get closer to your long-term goals.

While it's challenging to time the market perfectly, buying with your long-term goals front of mind can mitigate short-term fluctuations.

What do you need to buy a house?

So, you’ve decided now is as good a time as ever to buy a home. But what exactly do you need to get started? Here’s a quick breakdown of what you’ll need to be able to purchase a property.

1. Prepare your finances

We’ve said it once, but we’ll say it again, before you can buy a home, you’ll need to save up for a deposit. While most lenders like to see a deposit of at least 20% of the purchase price, you may still be able to buy a home with a smaller deposit, you’ll just need to pay for lenders mortgage insurance (LMI) to cover the extra risk of a low deposit loan.

It’s also important that you’re prepared to cover the other upfront costs that come with buying a home, including:

• Stamp duty
• Building and pest inspections
• Legal and conveyancing fees
• Land tax and registration of title
• Mortgage establishment fees
• Insurance
• Moving costs

2. Compare lenders

Once you’ve got your finances in order, you can start exploring your options when it comes to lenders. When it comes to comparing lenders, it’s important to consider a range of factors to find the best loan for your needs. Take a look at their interest rate and comparison rate, the loan features and facilities as well as the registration and administration fees. If you need help narrowing down your options, you might want to consider working with a mortgage broker. They can help you find a deal that is suitable based on your circumstances.

You might also want to think about getting pre-approval. This can help provide an idea of your borrowing capacity. It also demonstrates to real estate agents and sellers that you’ve already done some of the legwork and you’re a serious buyer.

3. Find a property

Next, it’s time to find a property to buy. Research the areas you're interested in. Visit different suburbs and attend open homes to get a feel for the market and compare properties. 

4. Make an offer

Once you’ve found a property you’re keen on, it’s time to make an offer. Be prepared to negotiate with the seller or their agent to agree on a final price. Review the contract of sale carefully, and have your solicitor or conveyancer check it for any issues or conditions that need to be addressed.

Your conveyancer or solicitor should also take care of the legal aspects of the property transfer, including conducting searches, preparing the contract of sale and ensuring a smooth settlement process.

5. Finalise the purchase

After your offer has been accepted, it’s time to get the ball rolling on the settlement process. Conduct your due diligence and work toward satisfying the terms and conditions of the contract of sale. Depending on what these are, you might need to organise a building and pest inspection and submit your finance application for approval. 

Depending on where you live, you’ll need to arrange home insurance either before you sign the contract of sale, shortly after exchanging and signing the contract or from the settlement date. 

During the settlement period, your conveyancer or solicitor will finalise the legal documents, and the lender will prepare the mortgage. On the settlement day, the purchase price balance is paid and ownership will pass to you. Then it’s time to pick up the keys and make yourself at home.

For a competitive interest rate, look no further than Unloan. We offer a new kind of home loan that’s designed to save you more. Check out our features today.

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).

Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.