Today’s highly competitive mortgage market means we’re spoilt for choice when it comes to home loans and mortgage lenders. However, it does raise the question of how to choose between lenders and loans.

We explain what you need to weigh up.

What to look for when comparing mortgage lenders

Three key considerations should be top of mind when selecting a lender.

1. How much of a deposit will you need?

Different lenders all have varying ’loan to valuation ratios’ (LVRs) – that’s the proportion of a property’s value you can borrow, which in turn shapes the deposit you’ll need.

The question is, how do you know if you have enough of a deposit without approaching a multitude of lenders? More on this shortly.

2. Will a lender frown on the property or area you plan to buy into?

Home loan lenders can impose restrictions on certain postcodes or the types of property they’ll lend against – something that can make it harder for you to work out if you can secure finance.

The good news is that your Aussie Broker works closely with a panel of over 20 leading lenders*. That means he or she knows which lenders will be more suitable based on the deposit you need, the area you’re buying in and the type of property you plan to buy.

3. What sort of service will you get?

When you take out a home loan, you’re committing to a sizeable financial product, so it’s a no-brainer to expect good customer service.

Until you’ve partnered with a lender, it can be hard to know exactly what sort of service you’ll receive. Asking friends, family or work colleagues about their experiences with different mortgage lenders can be a useful starting point to gauge customer service.

Your Aussie Broker can help here too. Tap into our industry experience on what to expect from different home loan lenders over time.

What to look for when comparing mortgage products

Now let’s drill down to the main home loan factors to consider.

1. The home loan interest rate

Over the term of your home loan, even a small difference in your interest rate can make a significant difference to the overall cost of your mortgage.

That said, interest rates can change rapidly, and a loan that’s highly competitive today can start to look a little pricey further down the track. This is why it’s so important to look at home loan features.

2. Loan features

The various features of a home loan are worth more than a passing glance as they can go a long way to helping you pay off your mortgage sooner.

The trick is to understand which features are right for your needs – and which you will genuinely use. Your Aussie Broker can help you work out which features can offer value for your situation – and how you can put them to work so you can get ahead with your home loan.

3. “Hidden” loan costs

If you believe the only significant cost of a loan is the interest rate, think again. Home loans can come stacked with a range of sneaky fees and charges, which can bump up the overall cost.

Upfront costs like valuation fees and lender’s legal fees aren’t the only thing to watch for. Be sure to check out any ongoing loan fees like monthly service fees and/or annual package fees that may apply to package home loans. You could also be charged a separate fee for services such as redraw.

The bottom line is that you need to know what sort of fees you could be up for and how they could hit your hip pocket.

If it all sounds complicated, rest assured help is at hand.

Talk to your Aussie Broker to cut through the clutter and find the lender and loan that is right for you.