Buying guide
What are home loan interest rates and how do they work?
A quick, jargon-free guide to the cost of borrowing.
AI summary
A home loan interest rate is the cost of borrowing money from a bank to buy property. Rates are heavily influenced by the Official Cash Rate (OCR) set by the Reserve Bank.
You can choose a fixed rate for certainty, locking in your repayments for a set term. Alternatively, a floating rate moves with the market, offering flexibility for extra payments but less predictability. You can also split your loan between both. Always seek professional advice from your bank or a mortgage broker.
What you’ll learn:
What are home loan interest rates, and why do banks charge them?
You need to be aware of home loan interest rates when budgetting for your home.
How are mortgage interest rates calculated?
You'll need to decide if you'd prefer a fixed or floating interest rate.
Fixed and floating interest rates explained
Floating interest rates
Fixed interest rates
A bit of both
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