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What's your best rate?

That old pearler.

The thing is, that’s what everyone wants to know, I get it, but the answer is – “I don’t know, who are you & what do you want to do?” And that doesn’t seem to go down so well.

There is no longer a one size fit all approach to lender, not in terms of home loans or in terms of lenders. No one lender is going to be able to look after everyone and no one loan is going to be offered to everyone.

Policy determines more about which loan you end up with than interest rate, as a starting point anyway.

What's your best rate?

Self employed people are the perfect example, if you have a growing business where the year before last was rubbish and the last year was fantastic, you’re probably not going to qualify for a loan with most lenders, so now we select the best from those who will approve you.

Deposit or equity is another factor, lenders are looking to cherry pick borrowers so if you haven’t got a great deposit or a lot of equity they mostly aren’t offering you the best deals that they can, you’ll probably end up paying a little more than someone who’s borrowing less than 80% of their property value. You're probably still better off getting it done than not though so don't let a small premium put you off.

The purpose of the loan also comes into play with investment and business lending attracting a premium with most lenders presently, thanks to Apra changes last year.

So realistically, who you are and what you want to do determines what you end up paying now more than ever.

What you can do about this, however, is seek a broker (shameless plug) who has access to a wide range of lenders & can analyse which are going to do the job for you now and moving forward, then work from there as to who can offer you the best rate you would be approved for based on your circumstances and what you want to achieve.

And don’t forget there are many “under the table” specials that you probably wont even hear about unless you’re in the industry.

At the end of the day the best rate is the one that allows you to take the opportunity you want to take and pay the loan off as fast as you possibly can.

Western Weekender article

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