Find the best home loan product – with key fact sheets
As of 1 January 2012, the Australian Government requires all lenders (banks, credit unions and building societies) selling standard home loans to provide consumers with a Home Loan Key Facts Sheet (HLKFS) about their standard variable and fixed rate home loans, if they ask for one.
The HLKFS have to be presented in the same format and layout regardless of the lender, and are designed to enable consumers to easily compare home loans provided by different lenders.
The HLKFS are prepared based on consumers’ individual requirements for their loan amount, loan term and interest type (fixed or variable) and summarises information about the loan, including:
- The interest rate (nominal and comparison rate i.e. including fees)
- Total amount to be repaid (including loan amount and fees)
- Amount repaid for every $1 borrowed
- Establishment and ongoing fees
- Repayments per month and per year
They also include information about how your monthly repayments will change if interest rates increased by one per cent and how much sooner you could repay the loan if you increased your repayments by $200 per month.
I’m pleased to see initiatives like this implemented that help people find the best product for their personal circumstances. Every lender uses a different language to describe its products and features it can be quite difficult for people to compare them directly to one another.
Buying a home is a big decision for most Australians, and they will spend a good time of their adult life paying it off – so it is very important to pick the right product. We feel the HLKFS are a great tool, empowering consumers in their choice of product without the bells and whistles distracting from the actual basic features of the loan.
If you’re thinking about taking out a home loan, make sure you ask for a HLKFS from several lenders to enable you to shop around for the best deal. Financial institutions are also required to make the HLKFS available on their website if they provide information about home loans or enable home loan applications online. You’ll find ours here: http://www.beyondbank.com.au/tools-calculators/home-loan-repayment-calculator.html
^Wayne – Chief Financial Officer