Buying guide
What are home loan interest rates and how do they work?
A quick and easy guide.
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AI summary
Understanding home loan interest is crucial when buying a house. It's the cost of borrowing from a lender, calculated daily on your outstanding loan balance. The Reserve Bank's Official Cash Rate (OCR) is a key factor influencing the rates banks offer.
You typically choose between two main options:
- Fixed rates offer payment certainty for a set term but may have fees for extra repayments.
- Floating rates change with the market, offering flexibility but less predictability.
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
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